US stock futures fell slightly on Wednesday morning as investors tried to build on a strong rally on Tuesday.
Dow Jones Industrial Average futures fell 39 points, or 0.1%. S&P 500 futures traded 0.3% lower, while Nasdaq 100 futures were down 0.5%.
The move in futures came as the recent heavy selling in the stock market appeared to have paused. On Tuesday, the Dow Jones rose 431 points, or 1.3%, while the S&P 500 rose 2%, and the Nasdaq Composite rose about 2.8%.
The Dow has fallen for seven straight weeks, but stocks have been flat over the past three trading sessions.
Last week, the S&P 500 plunged on the brink of a bear market – or 20% below its record high – but the index is now up 4% since Thursday’s close.
Stocks and other risky assets have come under inflationary pressure and the Federal Reserve’s attempt to curb price increases by raising interest rates has led to concerns about a possible recession. Federal Reserve Chairman Jerome Powell said at the Wall Street Journal conference on Tuesday that “there will be no hesitation” about raising interest rates until inflation is brought under control.
However, some recent economic data, including the jobs report and retail sales data from April, are still showing growth in the US economy.
“There is a big difference between corrections in the equity markets and direct bear markets,” said Matt Stuckie, senior portfolio manager at Northwestern Mutual Wealth Management. “The divergence in bear markets almost always has to do with some kind of sluggish macroeconomic environment, or at least one that is inevitable on the outlook horizon over the next six to twelve months. For us, as we sit here today, just don’t see that.”
A busy week of retail earnings continues on Wednesday, with Target and Lowe’s releasing results before the opening bell.
Investors will also get an updated look at the housing market, with data on new housing and building permits for April due on Friday morning.