U.S. stocks fell in early trade on Tuesday after last week’s rally sparked the S&P 500’s longest losing streak in more than 20 years.
The benchmark fell 1.2% in about 45 minutes before the open, a decline that followed the S&P 500’s best week since November 2020.
The Dow Jones Industrial Average fell about 1% and the Nasdaq Composite lost 1.4%.
All three had previously posted weekly gains of more than 6%, rebounding from seven straight weekly losses for the S&P 500 and Nasdaq and eight straight weekly losses for the Dow.
Meanwhile, oil futures were higher on reports that Chinese authorities were preparing to end a two-month COVID-19 lockdown in Shanghai and that European Union leaders agreed to stop buying crude oil and oil products from Russia. WTI crude futures rose 3.6% to $118.70, while Brent crude futures rose 3.7% to $123.83.
Shares of movie giant AMC (AMC) were up 10% in early trade after the debut of “Top Gun” over Memorial Day weekend. Compared with last year’s holiday weekend, U.S. theaters are estimated to have grown 122% year over year, AMC said in a statement Tuesday, underscoring positive signs of the industry’s post-COVID recovery. The pre-market move saw AMC shares rise for a fourth straight day after rising nearly 40% over the past three sessions.
Wall Street’s recent rally follows a string of favorable quarterly earnings in recent sessions that have helped temporarily ease concerns about the impact of inflation on corporate earnings. Recent economic data showing signs of peaking in prices also helped boost sentiment.
Still, stocks have fallen sharply over the past year, and some strategists are skeptical of a bottoming out.
“Last week’s strength is ultimately going to be another bear market rally,” Morgan Stanley Chief Information Officer Michael Wilson said in a note to clients.
Despite recovering from some losses, stocks were volatile over the month on worries that decades of high inflation and the Federal Reserve’s efforts to stem price surges by raising interest rates could tip the economy into recession.
“After the oversold rally, the main reason for this particular rally is that the Fed may consider a September pause,” Wilson wrote, adding that “inflation is still too high for analysts to like.” The Fed remains in office, so whatever Investors may be hoping how insignificant it is to change the downtrend in the stock price. ”
Investors this week are expected to be guided by a slew of key jobs data, including the all-important May jobs report due on Friday.
Earnings season is over, but more reports from the likes of Salesforce.com (CRM), GameStop (GME), Chewy (CHWY) and Hewlett-Packard (HPQ) are still lined up until Friday.