Stock futures were higher on Tuesday morning after ending the day lower, snapping a two-day advance that started when a better-than-expected inflation report raised hopes that the Federal Reserve would soon ease interest rate hikes.
Futures tied to the Dow Jones Industrial Average rose 117 points, or 0.35%. S&P 500 futures and Nasdaq 100 futures rose 0.46% and 0.71%, respectively. Taiwan Semiconductor, Louisiana-Pacific and superior jumped after regulatory filings showed Warren Buffett’s Berkshire Hathaway had bought new positions in the first two and raised its stake in the latter.
Investors also looked to records to see what big investors Michael Burry, Bill Ackman, David Tepper and others bought or sold through the third quarter.
Shares lashed during the day on Monday following comments from Federal Reserve chairmen Lael Brainard and Chris Waller about future interest rate increases. While Brainard said the central bank could ease rate hikes, Waller said the market was overly optimistic and should prepare for higher rates.
“After last week’s CPI shortfall led to a huge stock rally and reversal in the dollar, the critical theme for markets this week will be the Fed’s response,” Huw Roberts, head of analytics at Quant Insight, wrote in a Monday note.
He added that the degree to which speakers this week reverse or support the market’s recent moves “will be critical.”
Shares later fell on a report that Amazon will lay off about 10,000 employees, potentially starting this week.
Markets will get more inflation information on Tuesday when the producer price index, a measure of wholesale inflation, is released. Investors will also study comments from Philadelphia Fed President Patrick Harker, Fed Governor Lisa Cook and Fed Deputy Chairman for Supervision Michael Barr.
Earnings season continues this week with retail reports on deck. Walmart and Home Depot release results on Wednesday while Target, Lowe’s, Bath and Body Works, Macy’s, Kohl’s and Foot Locker report later in the week.