Market Snapshot: U.S. stock futures rally after suffering their worst day in two years

Stock-index futures turned higher Tuesday as investors attempted to gauge the appetite for a bounceback from the biggest one-day percentage loss for the Dow Jones Industrial Average and the S&P 500 index in more than two years.

U.S. stocks were hammered Monday, joining a global equity rout blamed on worries about the potential global economic impact of the spread of COVID-19 in countries outside of China.

What are major indexes doing?

Dow futures YM00, +0.44% rose 123 points, or 0.4%, to 28,091, while S&P 500 futures ES00, +0.42% gained 14 points, or 0.4%, to 3,240.50. Dow futures had gained as much as 266 points overnight. Nasdaq-100 futures NQ00, +0.69% rose 65 points, or 0.7%, to 9,156.

On Monday, the Dow DJIA, -3.56% shed 1,031.60 points, or 3.6%, to settle at 27,960.80, while the S&P 500 SPX, -3.35% slumped 111.86 points, or 3.4%, to close at 3,225.89 — the biggest one-day percentage falls for both indexes since Feb. 8, 2018. The Nasdaq Composite COMP, -3.71% dropped 355.31 points, or 3.7%, to finish at 9,221.28, its biggest one-day drop since December 2018.

What’s driving the market?

“Investors remain stuck between their appetite for risk and the blurry impact of coronavirus which is leading to mixed market sentiment this week,” said Pierre Veyret, technical analyst at ActivTrades, in a note.

A Tuesday pause or bounceback for equities would not be unusual. The past 10 times that the S&P 500 index fell by as much as 3%, for example, in the next trading session it declined just 0.27% on average, according to Dow Jones Market Data.

Researchers at Bespoke Investment Group also said Monday that, over the past 11 years, declines of more than 2% for the S&P 500 have tended to see healthy rebounds, particularly when that daily slide happens on a Monday. “Since March 2009, there have been 18 prior 2%+ drops on Mondays, and SPY has seen an average gain of 1.02% on the next day (Turnaround Tuesday),” they wrote.

Still, some analysts urged patience. “If you have faith in the health authorities of Iran and Italy and Afghanistan to control their cases of coronavirus, then by all means go bargain hunting,” said Jeffrey Halley, OANDA senior market analyst, Asia Pacific.

Read more: The Dow plunges more than 1,000 points — here’s how the stock market tends to perform after big drops

The U.S. economic calendar features the Case-Shiller home price index for December at 9 a.m. Eastern, while a February reading on consumer confidence is due at 10 a.m. Eastern.

With speculation growing over the potential for a Federal Reserve rate cut as worries grow over the effects of the viral outbreak, investors will pay close attention to remarks by Fed Vice Chairman Richard Clarida scheduled for 3:15 p.m. Eastern.

Which companies are in focus?

Opinion: HP sends mixed message on Xerox while business continues to decline

How are other markets trading?

The price of a barrel of West Texas Intermediate crude for April delivery CLJ20, +0.17% on the New York Mercantile Exchange rose 0.2% to $51.54.

Gold GCJ20, -1.38%, which jumped 1.7% Monday to a more-than-seven-year high as investors piled into traditional havens, was down 1.4% on Tuesday at $1,652.70 an ounce.

The benchmark U.S. 10-year Treasury note TMUBMUSD10Y, -0.42% edged up fractionally to 1.379% one day after nearing another all-time low on demand for safe haven assets. Bond yields fall as prices rise.

The U.S dollar index DXY, -0.09% was down 0.1% against a basket of currency trading partners.

Asian markets continued to fall, with Japan’s Nikkei NIK, -3.34% —which was closed for a holiday Monday — down over 3%. Australia’s S&P/ASX 200 XJO, -1.60% fell 1.6%, though South Korea’s Kospi 180721, +1.18%, which fell 4% on Monday, rebounded 1.2% on Tuesday.

European stocks SXXP, -0.54% couldn’t hold early gains. The FTSE MIB I945, -0.26% in Italy, which has the highest number of confirmed coronavirus cases in Europe, fell 0.8%.