Stock futures rose slightly on Tuesday morning as concerns about COVID cases in China kept investor sentiment in check.
Futures linked to the Dow Jones Industrial Average rose 59 points, or 0.17%. S&P 500 futures rose 0.15%, while Nasdaq 100 futures rose 0.03%.
China saw The first deaths on the mainland from Covid since May over the weekend. That sparked concerns among investors that the country might reinstate restrictions aimed at slowing the spread of the virus, which would hurt business.
The news from China pushed investors away from growth stocks on Monday and toward defensive sectors such as healthcare and utilities, said David Waddell, CEO of Waddell & Associates. It also led to “reflexive” buying in US dollars, he said, adding to the pressure on bond yields.
“On low volume days like today, the market gets Pavlovian,” he said. “If you want to understand this market, watch the dollar.
Stocks fell, with the Dow losing 45 points, while the S&P 500 and Nasdaq Composite fell 0.4% and 1.1%, respectively. Losses on the Dow were restricted to 6.3% on Disney after the comeback Bob Iger as CEO.
On Tuesday, several Fed officials are scheduled to speak, including Kansas City Bank President Esther George and St. Louis Fed President James Bullard.
Economic reports due for release include the Philadelphia Fed’s Non-Manufacturing Business Expectations Survey and the Richmond Fed’s Manufacturing Index.
Investors are also watching earnings reports from Dollar Tree, Best Buy, HP and Nordstrom.