US futures rose slightly on Thursday night, as traders watched to see if the S&P 500 fell into bear market territory.
S&P 500 futures rose 0.1%, while Nasdaq 100 futures gained 0.3%. Futures tied to the Dow Jones Industrial Average rose 34 points, or 0.1%.
Those moves come after another down day on Wall Street. Meanwhile, the Dow and Nasdaq fell 0.8% and 0.3%, respectively.
The S&P 500 is down 0.6 percent and is now 18.6% below its closing record high in early January. The index is also 19% below the all-time high of the day reached earlier this year. At those levels, the benchmark index is only in sight as it enters a bear market – defined by many on Wall Street as a 20% drop from its 52-week high.
Stocks have been under pressure this week – with the S&P 500 and Nasdaq both losing more than 3% and the Dow down 2.9% – as the latest quarterly numbers come from big box retailers like Walmart and Target. raising concerns about a weakening consumer base and the ability for companies to cope with decades of high inflation. Target and Walmart are plummeting after releasing quarterly results this week.
“While multiple trending crossovers are triggering the current sell-off, the closest cause of the recent uptick in equity declines revolves around fear about the US consumer,” said Director. Glenview Trust executive Bill Stone writes. “For the first time in the post-Covid era, retailers are stuck with some excess inventory. The cost of inflation is also affecting their earnings.”
“Finally, there is evidence that low-end consumers are feeling pinched from the price hikes,” said Stone.
Ross Stores is the latest retailer to drop after announcing earnings. Shares fell more than 22% in after-hours trading. Chief Executive Officer Barbara Rentler said that “after a better-than-planned start to the period, sales fell short of the balance for the quarter.”
Meanwhile, the Federal Reserve has signaled that it will continue to raise interest rates as it tries to curb the recent rise in inflation. Earlier in the week, Chairman Jerome Powell said: “If that involves breaking through widely understood neutral levels, we wouldn’t hesitate to do so.”
The tough stance on monetary policy this week has raised concerns that the Fed’s actions could tip the economy into recession. On Thursday, Deutsche Bank said the S&P 500 could down to 3,000 if a recession is coming. That’s 23% below Thursday’s close.
Stocks have struggled to find a foothold for about two months, with the Dow accelerating for eight straight weeks of declines. The S&P 500 and Nasdaq experienced a seven-week losing streak.
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