U.S. stock futures advanced on Tuesday following a selloff in the previous session, giving hope to investors that December—historically a strong month for markets—can indeed get off to a good start.
Futures for the Dow Jones Industrial Average rose 50 points, or 0.1%, after the index tumbled 427 points on Monday to finish at 47,289. S&P 500 futures gained 0.3% with contracts tracking the tech-heavy Nasdaq up 0.4%.
Stocks dropped on Monday as risk sentiment weakened, characterized by a deep selloff in Bitcoin and other cryptocurrencies. The possibility of an interest-rate hike in Japan—which could shift significant Japanese investments abroad—saw U.S Treasury yields spike, contributing to the selloff in equities.
“The sell-off has paused for now,” said Jim Reid, a strategist at Deutsche Bank, in a Tuesday note. “Markets got December off to a rocky start yesterday, with bonds and equities losing ground, alongside a sharp slump in Bitcoin.”
Broadly, investors continue to watch the economic backdrop amid expectations the Federal Reserve will cut interest rates during its monetary policy meeting next week.
Investors will also keep an eye on geopolitics, namely the prospect of peace in Ukraine—which has a bearing on oil markets and thus inflation, if peace brings lower crude prices globally.
“We’ll see some focus on geopolitics as Trump’s envoy Witkoff is due to meet Russia’s President Putin in Moscow to discuss U.S. proposals to end the war in Ukraine,” said Reid.