U.S. stock futures point to wobbly February start after worst month since start of pandemic

The Nasdaq Composite Index
COMP
slid 9% decline in January, also the biggest monthly drop since March 2020, and the worst January performance since 2008, according to Dow Jones Market Data. The index rallied 3.4% to 14,239.88 on Monday, though.

Read: Bears beware. Past corrections for the S&P 500 are only 15% on average, outside of recessions

And: Market corrections are good buying opportunities, says Goldman Sachs — but only when this happens

What’s driving the markets?

Investors on Tuesday indicated some hesitancy to follow up Monday’s strong gains, which were a bright note after a dismal January performance for stocks, as investors fretted in part over worries about the prospects for higher U.S. interest rates. European markets gained on back of Wall Street’s rally, even amid Wall Street’s follow-through struggle. Chinese and some other Asian markets were closed for the Lunar New Year holiday.

“Investors continue to buy the dips almost everywhere this week, with market sentiment boosted by a strong earning season so far where most companies have beaten expectations,” said Pierre Veyret, technical analyst at ActivTrades, in a note to clients.

“Technically speaking, most indexes have registered solid rebounds over major support zones and are now challenging key resistance levels. If cleared, these resistances could open the doors to an extended rally, potentially driving prices up to new record highs on the short to midterm basis,” he said.

The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
fell 2 basis points to 1.756%, with oil prices softer
CL
and the ICE U.S. Dollar index
DXY
down 0.2%.

On the U.S. data front, investors will get the Institute for Supply Management’s manufacturing index for January, along with job openings and construction spending for December, all at 10 a.m. Eastern Time.

Tuesday also marks a big earnings reporting day, with Stanley Black & Decker
SWK,
United Parcel Service
UPS
and Exxon Mobil
XOM
due to announce results ahead of the open. Investors will get more big technology earnings after Tuesday’s close from Google-parent Alphabet
GOOGL,
along with PayPal
PYPL
and Advanced Micro Devices
AMD,
General Motors
GM
and Starbucks
SBUX
will also report.

Read: You can still find a haven in tech stocks: These 20 offer the safety net of highly stable profits