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Stock futures are lower after big market reversal to begin May

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U.S. stock futures moved lower Monday night after the key averages staged a giant reversal to begin the month.

Dow Jones Industrial Average futures fell 57 points, or 0.2%. S&P 500 and Nasdaq 100 futures dipped 0.2% and 0.3%, respectively.

Earlier within the day, the key averages posted a wild up-and-down session with the Nasdaq Composite rising 1.63% in a late-day comeback, despite falling as much as 1.07% earlier within the day. The S&P 500 rose 0.57% after hitting a latest 2022 low earlier within the session.

Meanwhile, the Dow Jones Industrial Average gained 84 points, or 0.26%. At its session lows, the Dow was down greater than 400 points.

Those moves come on the back of a brutal month in April for stocks. April was the worst month since March 2020 for the Dow and S&P 500. It was the worst month for the Nasdaq since 2008.

The benchmark 10-year Treasury yield also climbed to a latest milestone on Monday. The bond yield hit 3.01% through the session, its highest point since December 2018.

“I feel it’s really hard to try to select bottoms out there or pick tops out there,” Tim Lesko, director and senior wealth advisor at Mariner Wealth Advisors, said Monday on CNBC’s “Closing Bell.” “I feel what we’re seeing is that in the long term, we have a really high allocation to stocks, persons are beginning to rebalance and there is some competition for stock now within the marketplace.”

Wall Street is essentially expecting rates of interest to be raised 50 basis points on the Federal Reserve meeting this week. Some investors consider expectations of aggressive monetary tightening from the central bank are already priced into markets.

“With financial conditionings tightening as they’re, we expect the Fed goes to be barely more dovish than the market is expecting,” Eric Johnston, head of equity derivatives and cross asset products at Cantor Fitzgerald, said Monday on CNBC’s “Closing Bell.”

The Federal Open Market Committee will issue an announcement at 2 p.m. ET on Wednesday. Fed Chair Jerome Powell is anticipated to carry a press conference at 2:30 p.m.

Numerous consumer-oriented corporations are still reporting earnings this week. Shares of Avis Budget jumped greater than 6% during prolonged trading after the automotive company surpassed earnings expectations on the highest and bottom lines. Pent-up travel demand spurred investors to rent cars from Avis Budget despite higher prices.

Chegg’s stock price tumbled nearly 30% during prolonged trade after the textbook company issued weak guidance for the total yr despite exceeding earnings expectations.

Restaurant Brands International, Pfizer and Paramount Global are set to report earnings before the bell on Tuesday. Airbnb, AMD, Lyft and Starbucks are expected to report earnings after the bell the identical day.

Traders may even look ahead to the newest reading of the Job Openings and Labor Turnover (JOLTS) data that is anticipated at 10 a.m. ET on Tuesday. Data on auto sales for April can be expected on Tuesday.

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