Stock futures rose Tuesday, the first day of November, as Wall Street tried to build on last month’s sharp gains and looked ahead to a key Federal Reserve decision on rates.
Futures tied to the Dow Jones Industrial Average were up 202 points, or 0.6%. S&P 500 and Nasdaq 100 futures added 0.9% and 1.1%, respectively.
The rise in stock futures came as rates fell ahead of the central bank’s rate decision as investors hope for a sign that the Fed will ease its tightening stance in the months ahead. A better-than-feared earnings season, meanwhile, continued with a strong report from Pfizer while Uber shares popped on a revenue beat and strong gross bookings.
Some traders also pointed to optimism from unconfirmed reports that China could be moving away from its Zero Covid policy as a source for Tuesday’s early gains.
“Stocks are trading very well following unconfirmed reports on social media overnight about China formulating a plan to exit its ‘zero tolerance’ approach to COVID,” wrote Adam Crisafulli of Vital Knowledge.
“While the consensus narrative has embraced the ‘Fed will slow its tightening pace’ narrative, China remains among the most hated markets on the planet w/its equity indices at multi-decade lows – there’s still a lot more room to rally on the upside in the coming quarters assuming a more realistic COVID approach is implemented,” he added.
Wall Street on Monday wrapped up a strong month of gains, with the Dow rallying nearly 14% for its biggest monthly advance since January 1976, as investors rotated out of technology and hedged hopes on stalwarts like banks. The S&P 500 and Nasdaq Composite added about 8% and 3.9%, respectively.
Tuesday also kicks off the Fed’s November meeting, which many expect will result in a 75 basis point interest rate hike. Investors will also monitor the central bank’s statement and Fed Chair Jerome Powell’s press conference for signs that the Fed may slow its tightening pace.
Economic releases for Tuesday include job openings data and construction spending for September. The ISM manufacturing report for October is also due.