Stock futures point to rebound after Wall Street’s Christmas Eve meltdown

U.S. stock futures pushed higher Wednesday, as equities attempted to bounce back after the worst Christmas Eve trading session in the history of Wall Street.

U.S. stocks saw an early close Monday and were closed Tuesday for Christmas Day.

How are benchmarks performing?

After crossing back and forth across the flat line in early action, Dow Jones Industrial Average futures YMH9, +1.51%  were up 120 points, or 0.5%, to 21,820 while S&P 500 futures ESH9, +1.74%  rose 17.8 points, or 0.7%, to 2,359.75. Nasdaq-100 futures NQH9, +2.30%  were up 67 points, or 1.1%, to 5,959.

In a shortened Christmas Eve session Monday, the Dow Jones Industrial Average DJIA, +0.89% slid 653.17 points, or 2.9%, to 21,792.20, marking its lowest close since Sept. 7, 2017, while the S&P 500 index SPX, +1.10% fell 2.7% to 2,351.10, its lowest since April 21, 2017. The Nasdaq Composite IndexCOMP, +1.60% COMP, +1.60%  tumbled 2.2% to 6,192.92, its lowest close since July 10, 2017.

Another negative session Wednesday would mark five straight losing sessions. The Nasdaq officially entered bear-market territory on Friday, and is now off 23.6% from its record close set Aug. 29. The S&P is down 19.8% from its Sept. 20 record close, and the Dow has slid 18.8% from its Oct. 3 record close.

What’s driving the market?

With many traders out for the holidays, volumes are expected to be thinner and moves could be exaggerated. Monday’s dramatic session came after Treasury Secretary Steven Mnuchin tweeted that he had spoken with the CEOs of the country’s six biggest banks to assess the health of the banking system, raising concerns that the administration knows something the market doesn’t.

On vacation in Cabo San Lucas, Mexico, Mnuchin also held a call Monday with the president’s Working Group on financial markets “to discuss coordination efforts to assure normal market operations.”

CNN, citing a source close to the White House, reported that Mnuchin could be in “serious jeopardy” from an increasingly frustrated U.S. President Donald Trump, who has been publicly supportive of his top cabinet member. Mnuchin supported the appointment of Jerome Powell as chairman of the Federal Reserve, whose monetary policy decisions have come under repeated criticism by Trump. However, a White House source told CNN that Mnuchin’s job wasn’t on the line.

“They’re raising rates too fast because they think the economy is so good. But I think they will get it pretty soon. I really do,” Trump said of the Fed in his Christmas message on Tuesday. Some blamed accelerated losses on Monday on a tweet by Trump in which he blamed the Fed for the stock drop.

Meanwhile, parts of the federal government remain shut down as lawmakers in Washington tussle over funding for Trump’s proposed border wall. Trump also said Tuesday that the government won’t reopen until “we have a wall, fence, whatever they like to call it.

What are analysts saying?

“The president’s angry talk about his displeasure with Fed Chairman Jerome Powell is a great example of the old adage ‘loose lips sink ships,’” wrote Tom Block, Washington policy strategist at Fundstrat Global Advisors, in a note. “Markets would not take well to the overt politicization of the Fed with the firing of the chair over displeasure with interest rate policy.”

How are other markets trading?

Major European markets remained closed on Wednesday.

Japan’s Nikkei 225 index NIK, +0.89%  closed up 0.9% on the heels of a 5% slump Tuesday in reaction to Wall Street’s losses. China’s Shanghai CompositeSHCOMP, -0.26% fell 0.3%. European stock markets are closed and will reopen Thursday after an extended holiday break.

The ICE Dollar Index DXY, +0.15% rose 0.2% to 96.74, while gold GCG9, +0.46%rose 0.3% to $1,275.90 an ounce. February West Texas Intermediate crudeCLG9, +3.62% rallied 1.6% to $43.22 a barrel.

What stocks are in focus?

Roku Inc. ROKU, +4.93%  shares soared more than 6% in premarket activity, after Needham said the stock was its Top Pick for 2019.

Shares of electric car maker Tesla Inc. TSLA, +2.85%  were up 1.6% in premarket action after analysts at Wedbush said they remained bullish on Model 3 production and European demand. Shares had plunged on Monday.

Amazon.com Inc. shares AMZN, +3.81%  rose 1.6% in premarket trade after the company said it logged another record holiday season, boosted by demand for devices, including the Echo Dot, Fire TV Stick 4K with Alexa Voice Remote and Echo.

Shares of generic drugmaker Teva Pharmaceuticals Industries Ltd.TEVA, +1.85%  were up 3% premarket after Neos Therapeutics Inc.NEOS, -5.70%  said it entered a confidential settlement and licensing agreement with the company to resolve patent litigation related to a treatment for ADHD./marketwatch.com

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