U.S. stock index futures bounced on Tuesday, as the Dow Jones Industrial Average attempted to pare some of its big losses for October, its worst month in more than eight years. The S&P 500 closed in correction territory on Monday.
At around 8:30 am ET, Dow futures indicated a positive open of about 125 points. Futures on the S&P 500 and Nasdaq were also seen higher Tuesday morning.
A series of events added to the somewhat bullish sentiment in the morning.
President Donald Trump told Fox News Channel that he thinks the U.S. will make a “great” trade deal with China. This follows a Bloomberg News report on Monday that suggested the U.S. could be preparing to announce tariffs on all remaining Chinese imports by early December if talks between Trump and China President Xi Jinping breakdown next month.
Coca-Cola reported third-quarter earnings that topped Wall Street estimates, pushing shares up 0.6 percent.
General Electric shares fell after the company disclosed that the Securities and Exchange Commission is expanding its probe into the company’s accounting practices. Shares were higher earlier when GE said it would slashits quarterly dividend to just a penny a share, a bold move investors took to mean new CEO Larry Culp would take dramatic action to turn around the fallen blue chip.
U.S. stocks closed lower on Monday, giving up sharp gains in a turbulent session that saw the Dow travel than 900 points. Market participants cited the possibility of more U.S.-China tariffs and a drop in tech stocks for the decline.
The Dow is down 7.6 percent this month, its worst performance since May 2010. The S&P 500 is off by 9.4 percent this month, its worst such period since February 2009. On Monday, the S&P 500 closed in correction territory, down 10.2 percent from its record.
It is not uncommon for the stock market to end bad months with a bounce. Since 1952, when the S&P 500 was down more than 8 percent with two trading days left in a month, the benchmark bounced higher 80 percent of the time in those final two days, with an average gain of 2.75 percent, according to Bespoke Investment Group.
“If we can get through the week without too many setbacks, then investors may begin to see the light at the end of the tunnel and sense opportunities in the markets, rather than view it with anxiety and fear which has certainly been the case in recent weeks,” Craig Erlam, senior market analyst at OANDA, said in a note.
On the data front, consumer confidence for October is scheduled to be published at around 10 am ET. Third-quarter housing vacancies and Dallas Fed services data for October are due to be released later in the trading day on Tuesday.
Amgen, Baidu, eBay and Facebook are all set to publish their results after the closing bell.