Stock futures edge higher as market attempts comeback from earlier sell-off

U.S. equity futures edged higher ahead of overnight trading Wednesday following a choppy earlier session that saw stocks pare some losses from a steep sell-off on Tuesday.

Contracts on the S&P 500 climbed 0.21%, while Dow futures rose 62 points, or about 0.19%. Futures tied to the tech-heavy Nasdaq Composite were roughly flat after Facebook parent company Meta (FB) reported stronger-than-expected earnings after the close on Wednesday.

Still, with just three trading days left, the typically-bullish month of April is on pace for its worst performance since logging a 9.0% drop in 1970, according to data from LPL Financial Research.

“The usual suspects of a slowing economy, a hawkish Federal Reserve Bank, supply chain worries, war in Europe, and now another China shutdown have all combined to make this one of the worst starts to a year ever for both stocks and bonds,” LPL Financial Chief Market Strategist Ryan Detrick said in a commentary Tuesday.

Investors are in the throes of a lackluster earnings season, with 180 companies on the docket this week for quarterly reports. Moreover, traders are digesting mixed results from high-flying mega-cap tech giants: Apple (AAPL) and Amazon (AMZN) are set to round out Big Tech earnings after the closing bell on Thursday on the back of figures from Microsoft (MSFT), Alphabet (GOOGL), and Meta (FB) in recent days. The technology behemoths represent 22.2% of the S&P 500’s market capitalization.

Shares of Meta Platforms were up roughly 19% in extended trading Wednesday after the company reported first-quarter daily active users that beat expectations. Last quarter, Facebook lost $230 billion in market value, marking the worst single-day wipeout in history for any U.S. company after the social media giant reported a profit decline attributed in part to a drop-off of U.S. users on its flagship platform and competition from TikTok.

“The bar was super low for Facebook, and this report is likely to clear it,” analysts at Vital Knowledge said in a note following the earnings release.

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Elsewhere in markets, investors continue to grapple with headwinds from Russia’s invasion of Ukraine, persisting supply chain snafus and inflationary pressures, and a further liftoff on interest rates as soon as next week when the Federal Reserve meets for its next policy-setting May 4. Adding to those crosscurrents are renewed worries over an ongoing COVID-19 resurgence in key regions across China that threaten to exacerbate the global economic outlook.

LPL Financial pointed out, however, that double-digit declines during a year are normal.

“After only one 5% pullback all of last year, markets have provided an unfriendly reminder in 2022,” Detrick said in his Tuesday note, adding that since 1980, the average correction each year is 14.0%, putting this year’s 13.0% correction in perspective.

He also pointed out that during the 21 times since 1980 that the S&P 500 has seen double-digit declines from its peak, the index managed to come back and finish the year positive 12 of those years.

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6:14 p.m. ET Monday: Stock futures jump as markets attempt to claw back from sell-off

Here’s where stock futures were in post-market trading Wednesday evening:

• S&P 500 futures (ES=F): +34.50 (+0.83%) to 4,214.75

• Dow futures (YM=F): +96.00 (+0.29%) to 33,322.00

• Nasdaq futures (NQ=F): +179.25 (-1.38%) to 13,188.25

• Crude (CL=F): +$0.01 (+0.01%) to $102.03

• Gold (GC=F): -$2.70 (-0.14%) to $1,886.00 per ounce

• 110-year Treasury (^TNX): +4.6 bps to yield 2.8180%

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

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