Stock market news live updates: January 25, 2022

U.S. equity futures were little changed in post-trade trading on Monday after equities staged a historic turnaround at the end of a choppy session sparked by heightened fears over rate hikes and an early lackluster earnings season. Geopolitical tensions in Ukraine also weighed on the markets.

Contracts on all three major indices hovered near the fixed line heading into overnight trading. Earlier in the afternoon, the Dow recovered from losses of over 1,100 points to end higher, and the S&P 500 rebounded from corrective territory to close in the green.

The CBOE Volatility Index, or VIX, closed at around 29.90 after rising above 37 in intraday trading, its highest level since November 2020. In their newsletter, Nicholas Colas and Jessica Rabe of DataTrek Research rang the bell alarm over recent jumps from the so-called “Fear Gauge.” The VIX closed last week’s trade at 29 to surpass the initial level of 28 that DataTrek deemed significant, or “the first statistically valid level of market panic.” During Monday’s session, the VIX hovered around 38 before falling back, briefly passing the next level the company said it was watching: 36.

“If you are trading in this market, we continue to advise caution,” the founders of DataTrek said. “Clarity on Fed policy won’t come until Wednesday’s FOMC meeting, and even then comments from the Fed and Chairman Powell may be insufficient to calm investors.”

Bearish momentum in equities has been fueled by escalating concerns over monetary policy as the Federal Reserve seeks to intervene in rising inflation levels more aggressively than expected with tighter policy and rate hikes. . Investors are preparing for the central bank’s monetary policy meeting in January, which is due to start on Tuesday, followed by a new monetary statement and a press conference with Fed Chairman Jerome Powell on Wednesday.

“The Fed is in a very tough spot,” Brian Vendig, president of MJP Wealth Advisors, told Yahoo Finance Live. “They know that history has shown that if they react too quickly on interest rates, it adds to the risk of tipping the economy into a downturn and the risk of a recession.”

With corporate earnings on the way, stock watchers looking to fourth-quarter reports to ease inflation jitters have found little cause for optimism so far. Goldman Sachs chief U.S. equity strategist David Kostin pointed out that of 64 S&P 500 companies that have reported results since the start of the season, 52% slightly below average have exceeded consensus earnings estimates. analysts.

More concerning, according to Goldman, is the lack of corporate guidance amid unpredictable inflation and COVID-related conditions.

“Investors are more interested in management’s forward-looking advice, and recent news on that is concerning,” Kostin said. “Five of the six S&P 500 companies that provided formal Q1 2022 guidance following Q4 results lowered expectations.”

Jeff Buchbinder, LPL’s financial equity strategist, took a more bullish view: noting that despite supply chain disruptions, wage and other cost pressures, and the Omicron COVID-19 variant, with constituents of the S&P 500 which have reported so far, index earnings are still trailing 5% up, in line with the long-term historical average.

“The volatility we’ve seen this year is uncomfortable, but well within the range of normal based on history,” Buchbinder wrote in a note.

“The S&P 500 has averaged three pullbacks of 5% or more per year and one correction of at least 10% per year over its long history,” he said. “After a single 5% decline last year and huge gains from 2020 lows, we needed to see a decline.”

6:00 p.m. ET: Futures muted after turbulent trading session

Here’s how contracts on major Wall Street indices fared ahead of the overnight session:

  • S&P 500 Futures Contracts (ES=F): -2.50 points (-0.06%), at 4,401.25

  • Dow futures (JM=F): +17.00 points (+0.05%), to 34,270.00

  • Nasdaq futures contracts (NQ = F): -17.25 points (-0.12%) to 14,483.75

  • Raw (CL=F): +$0.76 (+0.91%) at $84.07 per barrel

  • Gold (CG=F): +$1.80 (+0.10%) to $1,843.50 per ounce

  • 10-year cash flow (^TNX): -0.7 bps for a yield of 1.750%

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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