Traders work on the floor of the New York Stock Exchange during morning trading on September 23, 2024 in New York City.
Michael M. Santiago | Getty Images
U.S. stock futures were higher Tuesday after the S&P 500 and the Dow Jones Industrial Average posted new closing records.
Futures linked to 30 stocks Dow rose 56 points, or 0.1%. S&P 500 Futures Contracts climbed by 0.08%, and Nasdaq-100 Futures Contracts increased by 0.1%.
Wall Street is coming off a session of gains, with the S&P 500 and the Dow up 0.3% and 0.2% respectively. The Nasdaq gained 0.1%.
The gains were modest but appear to be a continuation of last week’s rally after the Federal Reserve cut interest rates by half a percentage point. The federal funds rate is now in a range of 4.75% to 5%.
Interest-rate-sensitive sectors like utilities and financials have rallied in recent weeks in anticipation of Fed rate cuts. Four S&P 500 sectors are now outperforming the market in 2024, up from just two in July, according to Paul Hickey, co-founder of Bespoke Investment Group.
“There’s been a lot of movement under the surface. … You’ve seen the baton pass from these mega-cap stocks to the broader market,” Hickey said on CNBC’s “Closing Bell: Overtime” Monday.
While traders welcomed the disproportionate rate cut, the market will likely see increased volatility in the coming weeks, according to Quincy Krosby, chief global strategist at LPL Financial.
“Given the way valuations have risen on the back of post-Fed market momentum, the market will be very sensitive to any indication that the economy is slowing at a faster pace,” she said.
Traders will be looking at the latest economic data on Tuesday, including the Conference Board’s consumer confidence index for September. The Richmond Fed’s manufacturing index for that month will also be released in the morning.
