Stock market news live updates: Stock futures point to extended rebound after Nasdaq springs back from heavy losses

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Contracts on Wall Street’s main indexes ticked higher ahead of Tuesday’s open as investors await testimony from Federal Reserve chair Jerome Powell.

Equity markets clawed back from record intraday lows late Monday after extended losses. The Nasdaq eked out an afternoon rally to close in the green, while the S&P 500 and Dow extended their losing streak — even after modest comebacks.

Powell is scheduled for his re-nomination confirmation hearing before the Senate Banking Committee at 10:00 a.m. ET, where he is expected to get questions for about two hours on topics from possible rate hikes to the Fed’s ongoing trading scandal. The hearing will be streamed live on Yahoo Finance.

Worries over sooner-than-expected interest rate hikes have tempered investors’ optimism heading into the new year, placing equity markets in a risk-off mood so far in 2022. Meanwhile, Treasury yields have climbed, with the benchmark 10-year yield topping 1.8% to reach its highest level since January 2020.

“We’re seeing across the board a re-rating of what the Federal Reserve will do,” Steven Wieting, global chief investment strategist at Citi Private Bank told Yahoo Finance Live.

“The likelihood is very clear that the Fed will succeed in sinking inflation,” Wieting said. “That was going to happen one way or the other and we are just trying to gather how actively the Fed will be doing that.”

Goldman Sachs, Evercore ISI, and Deutsche Bank are now among Fed watchers repricing the Federal Reserve’s pace on rate hikes. The firms recently predicted short-term interest rates will be 100 basis points higher by the end of 2022 than where they are now.

“We revise our Fed outlook again given plummeting unemployment, strong wages, and anticipation of another hot inflation print,” said Evercore ISI’s Krishna Guha in a note.

In an interview with CNBC on Monday, JPMorgan Chief Executive Officer Jamie Dimon said he hoped for a “soft landing,” by the central bank as it gets ready to begin raising its benchmark federal funds rate in March.

“It’s going to be a little bit like threading a needle,” said Dimon, though adding that it was possible inflation is worse than the Fed believes and rates could be increased more than currently anticipated.

NEW YORK, NEW YORK – JANUARY 07: Traders work on the floor of the New York Stock Exchange (NYSE) on January 07, 2022 in New York City. Markets fell slightly in morning trading as investors reacted to a government jobs report showing that the U.S. economy added far fewer jobs than expected in December. (Photo by Spencer Platt/Getty Images)

“I’d personally be surprised if it’s just four increases,” Dimon said. “Four increases of 25 basis points is a very, very little amount, and very easy for the economy to absorb.”

The central bank’s monetary policy will remain in focus this week, with the Bureau of Labor Statistics’ (BLS) latest Consumer Price Index (CPI) in the spotlight as investors continue to gauge inflationary pressures and the Fed’s potential response.

Another red-hot read on the latest number is expected, with economists forecasting a print of 7.1% in December based on Bloomberg consensus data, up even more from November’s 6.8% year-over-year clip.

Bank earnings are also underway, with BlackRock (BLK), Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) set to report fourth-quarter results before market open on Friday.

7:35 a.m. ET: Small business confidence sees modest uptick

U.S. small business sentiment saw a slight increase in December, even amid a backdrop of growing inflation worries and labor shortages.

The National Federation of Independent Business reported that its Small Business Optimism Index rose 0.5 point to 98.9 last month. Of small business owners who responded to the organizations survey, 22% said inflation was their primary operating concern — up from 18% in November.

Despite concerns over inflation, at 57% of respondents, 2% fewer business owners from the prior month reported plans to raise prices, and the proportion of mom- and pop- operators planing to do so fell five points to 49%.

On the employment front, 49% of owners said they had job openings that could not be filled, up one point from November.

7:00 a.m. ET: Markets look to extend comeback as futures tick higher

Here were the main moves in markets ahead of Tuesday’s open:

  • S&P 500 futures (ES=F): +15.50 points (+0.33%), to 4,677.75

  • Dow futures (YM=F): +78.00 points (+0.22%), to 36,030.00

  • Nasdaq futures (NQ=F): +70.25 points (+0.45%) to 15,678.25

  • Crude (CL=F): +$0.25 (+0.32%) to $78.48 a barrel

  • Gold (GC=F): +$1.20 (+0.07%) to $1,800.00 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.78%

6:02 p.m. Monday ET: Stock futures remain unchanged after choppy session

Here’s where markets were trading ahead of the overnight session on Monday:

  • S&P 500 futures (ES=F): +1.50 points (+0.03%), to 4,663.75

  • Dow futures (YM=F): -6.00 points (-0.02%), to 35,946.00

  • Nasdaq futures (NQ=F): +6.25 points (+0.04%) to 15,614.25

  • Crude (CL=F): +$0.25 (+0.32%) to $78.48 a barrel

  • Gold (GC=F): +$1.20 (+0.07%) to $1,800.00 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.78%

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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