(Reuters) – U.S. stock index futures rose on Tuesday as investors returned from the Labor Day weekend to pick up beaten-down stocks after last week’s selloff on worries about monetary policy tightening.
Markets started September on a weak note as hawkish comments from Federal Reserve policymakers and data signaling momentum in the U.S. economy raised fears of aggressive interest rate hikes to cool inflation.
The benchmark S&P 500 closed at a six-week low on Friday, and is down nearly 18% so far this year.
The tech-heavy Nasdaq also ended at a six-week low on Friday but is down nearly 27% in 2022, as rising interest rates hurt megacap technology and growth stocks.
Shares of Microsoft Corp, Apple Inc and Tesla Inc gained about 1% each in premarket trading.
Data last week signaled resilience in manufacturing activity and the labor market, suggesting the Fed would need to keep raising interest rates in the coming months.
Traders see a nearly 70% chance of a third 75-basis-point rate hike at the Fed meeting later this month.
The Institute for Supply Management’s survey on services sector activity in August is due at 10:00 a.m. ET. U.S. consumer prices data next week also could influence expectations on monetary policy before the September meeting.
At 07:12 a.m. ET, Dow e-minis were up 231 points, or 0.74%, S&P 500 e-minis were up 29 points, or 0.74%, and Nasdaq 100 e-minis were up 88.75 points, or 0.73%.
The CBOE Volatility index, also known as Wall Street’s fear gauge, slipped to 25.6 points.
Bed Bath & Beyond Inc fell 13.3% after Chief Financial Officer Gustavo Arnal fell to his death from New York’s Tribeca skyscraper.
Digital World Acquisition Corp tumbled 21.7% after Reuters reported the blank-check acquisition firm that agreed to merge with Donald Trump’s social media company failed to secure enough shareholder support for an extension to complete the deal.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)
