EG: U.S. Stocks Set to Rebound as Futures Rise Nearly 4%
By Tommy Stubbington And Leslie Josephs
U.S. stock futures surged Tuesday, a sign that stock indexes here are set to stabilize despite another sharp drop in Chinese shares.
Stock futures indicated a 3.9% opening gain for the S&P 500 and a 3.8% increase for the Dow Jones Industrial Average. Changes in futures aren't necessarily reflected in market moves after the opening bell.
Stocks around the world tumbled on Monday as concerns about a slowdown in China's economic growth continued to rattle investors.
Shares in Shanghai closed 7.6% lower on Tuesday as the index fell below 3000 for the first time since December, following the worst one-day loss in more than eight years on Monday. Japan's Nikkei closed 4% lower after staging a short-lived recovery.
China's government, meanwhile, took fresh moves to free up money for its slowing economy. Its central bank said in a statement on Tuesday that it cut interest rates by one-quarter of a percentage point and reduced bank-reserve requirements by one-half of a percentage point.
Elsewhere, markets steadied, with European stocks trading higher.
The Stoxx Europe 600 index was 4.4% higher in early trade, following a 5.3% slump on Monday. Germany's DAX rose 4.4%, France's CAC 40 climbed 4.6%, and the U.K.'s FTSE 100 rose 3.4%.
Still, the scale of the gains was dwarfed by Monday's wild swings in the market.
The Dow plunged more than 1,000 points at Monday's open, before closing 3.6% lower, bringing its year-to-date declines to 11%.
"I suspect things will calm down in the short term," said Guy Foster, head of research at wealth manager Brewin Dolphin.
"The move has been dramatic while hardly sending equity valuations into bargain territory," he added.
Oil prices also steadied, with Brent crude 3.3% higher at $44.04 a barrel.
In currency markets, the dollar rebounded slightly from its big losses on Monday. The euro was down 0.8% against the buck at $1.1495. The dollar strengthened 1.2% against the yen to Yen120.124.
Write to Tommy Stubbington at tommy.stubbington@wsj.com and Leslie Josephs at leslie.josephs@wsj.com
