U.S. stock futures were slightly higher in overnight trading and pointed to modest gains at the open on Wednesday, continuing a volatile week for stocks gripped by the coronavirus shutdown.
Dow futures rose about 40 points. The S&P 500 and Nasdaq Composite were also set to open in the green, implying a rise of 6 points and 25 points, respectively.
On Tuesday, the Dow Jones Industrial Average fell 26 points or 0.1%, giving up a 900-point surge earlier in the day. The S&P 500 also registered a slight decline, falling 0.2%, having been up more than 3%. The Nasdaq Composite closed the day down 0.3% following a 3% rally.
“As [Tuesday’s] stock market shows, volatility is likely to remain for some time,” said Jim Paulsen, chief investment strategist at the Leuthold Group.
Some investors believed equities were getting ahead of the reality where coronavirus shutdowns are likely to weigh on the economy significantly beyond the second quarter. The major averages have rallied about 20% from their March 23 lows.
Goldman Sachs chief equity strategist David Kostin warned about a “bear market rally,” that appears like markets have bottomed but turns out to be premature.
“Risk to the downside is greater than the opportunity to the upside from this point where we stand today,” Kostin said on CNBC’s “Squawk on the Street” on Tuesday. “I would just remind you that in 2008 in the fourth quarter there were many different rallies, I call them bear market rallies, some of which almost 20% a couple of times — but the market did not bottom until March of 2009.”