US stock index futures edged higher in after-hours trading on Monday, showing signs of recovery following a significant selloff on Wall Street amid growing concerns over an economic slowdown.
S&P 500 futures saw a rise of nearly one percent, while Nasdaq 100 futures climbed by a little over one percent. Dow Jones futures were up by half a percent.
Market Selloff Intensifies
On Monday, major indexes dropped to their lowest levels in months. The S&P 500 fell 3% to 5,186.33, while the Nasdaq Composite dropped 3.4% to 16,208.38, both reaching their lowest levels in three months. The Dow Jones Industrial Average declined 2.6% to 38,703.27, hitting a two-month low.
The sharp drop happened because investors were worried about poor economic data, such as weak purchasing managers’ index readings and disappointing labour market reports. These indicators have fueled fears that the Federal Reserve’s prolonged high-interest rate environment may be pushing the economy towards a recession.
Fed Rate Cut Expectations Shift
Despite the market turmoil, expectations for Fed rate cuts have increased. CME FedWatch data shows markets are now pricing at least 100 basis points in rate cuts this year, with growing expectations for a 50 basis point cut in September.
Tech Stocks: Mixed Movements
Technology stocks, which led the market decline, showed signs of stabilizing in after-hours trading:
- Apple Inc. (AAPL) edged slightly higher after hours, following news that Berkshire Hathaway had reduced its stake by half.
- NVIDIA Corporation (NVDA) rose 2.4% in extended trading, recovering some ground after a 6% drop on reports of delays in its latest AI chip.
- Alphabet Inc. (GOOGL) saw a modest increase after falling 4.5% during regular trading hours following an antitrust ruling against its search engine practices.