Dow futures jump almost 500 points after a steep sell-off, with a 'sympathy bounce' for global stocks

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US futures recovered Tuesday after the three major indexes all plummeted over 5% last week.Spencer Platt/Getty Images
  • Dow futures rose almost 500 points Tuesday, as global stocks rose with US traders set to return from a holiday.

  • Stocks plummeted last week as investors grappled with fears interest rate hikes will spark a recession.

  • Oil prices moved higher, while cryptocurrencies showed signs of recovery after another brutal weekend.

US stock futures climbed Tuesday, as global equities rose, signaling a recovery after last week's brutal sell-off as investors' mood brightened somewhat.

In the US, markets look set to start the week on a more positive note, after being closed Monday for the Juneteenth holiday. Futures on the Dow Jones Industrial Average were up 491 points, or 1.64% higher, while S&P 500 futures rose 1.81%. Those on the tech-heavy Nasdaq 100 added 1.84%.

All three major US indexes tumbled over 5% last week as investors grappled with fears the Federal Reserve's efforts to tamp down soaring inflation could spark a recession, after the central bank hiked interest rates by 75 basis points for the first time since 1994.

"It looks like we'll see a 'sympathy bounce' for risk assets today," City Index market analyst Matt Simpson said. "With US traders returning to desks, it seems like a good opportunity for a small countertrend rally before the next leg lower for global equities."

Global stocks moved higher Tuesday, with the MSCI World Index up 0.54%.

In Europe, the pan-continental STOXX 600 index gained 1.1% in early trading, with Paris' CAC 40 rising 1.74% and Frankfurt's DAX 40 adding 1.13%. London's FTSE 100 was up 0.87%.

But on Monday, European Central Bank president Christine Lagarde warned the Eurozone faces a "severe" risk of correction in its financial and housing markets.

"While the correction in asset prices has so far been orderly, the risk of a further and possibly abrupt fall in asset prices remains severe," she said.

In Asia, equities finished their trading session in the green, with Japan's Nikkei 225 climbing 1.84%. The Hang Seng jumped 1.87%, although the Shanghai Composite slipped 0.26% as Beijing continued to battle a mild Covid-19 flare-up.

Here's how the other major asset classes are performing Tuesday morning:

  • The fixed income market's pains continued, with 10-year US Treasury yields up 32 basis points to 3.27%.

  • Oil prices moved higher. Brent crude was up 1.47% at $115.80 a barrel, and WTI crude gained 2.09% to reach $111.85 a barrel.

  • Investors sold some of their gold, which slipped 0.02% to $1,840 an ounce. But Silver climbed 0.64% to $21.72 an ounce.

  • Cryptocurrencies recovered some of their losses after plummeting over the weekend. Bitcoin gained 3.24% to move back above $21,000, and ethereum rallied 3.50% to reach $1,163.

Read more: After another brutal week for stocks and a big rate hike by the Fed are we closing in on a market bottom? 3 experts weigh in on where all this leaves investors

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