Dow Futures Rise After Three Weeks of Losses—and What Else Is Happening in the Stock Market Today

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Wall Street just notched a third straight week of losses. Will this week see a reversal?

Angela Weiss/AFP via Getty Images

Stocks were moving higher Tuesday as U.S. investors returned from the long Labor Day weekend, with attention returning to central banks’ fight against inflation and the likelihood of tighter financial conditions.

Futures for the Dow Jones Industrial Average advanced 220 points, or 0.7%, after the index tumbled 337 points last Friday to end at 31,318—closing out a third straight week of losses. S&P 500 futures rose 0.7% with the tech stock-heavy Nasdaq poised to gain 0.8%.

Overseas, London’s FTSE 100 rose 0.4% as Liz Truss was set to take over from Boris Johnson as British prime minister. European equities were up broadly, with the pan-regional Stoxx 600 climbing 0.5% after a selloff Monday driven by acute fears of an energy crisis after the Russian shutdown of the Nord Stream 1 natural-gas pipeline. The Shanghai Composite jumped 1.4% in Asian trade following an announcement from Chinese authorities that fiscal stimulus would be accelerated in the current quarter.

Investor attention likely will return to familiar themes this week: Inflation at a multi-decade high and the prospect that central banks will continue to combat it with much tighter financial conditions and in the process raise the risk of recession. A spike in energy prices in Europe and action over a slowdown in China—the second-largest economy—add a global lens to a week that will also see news from the Federal Reserve.

“U.S. markets might have been closed for the Labor Day holiday, but there was plenty of action in Europe as markets finally reacted to the closure of the Nord Stream gas pipeline on Friday evening,” said Jim Reid, a strategist at Deutsche Bank. “Asian equity markets are trading higher this morning following yesterday’s announcement by Chinese officials that they will speed up stimulus efforts in the third quarter to boost the economy as evidence points to a further loss of momentum for an economy marred by pandemic related losses and a property slump.”

Markets will be watching the Fed’s release of its Beige Book report on economic conditions on Wednesday, with Fed Chairman Jerome Powell delivering a speech on Thursday—when the European Central Bank will next meet over interest rates.

Write to Jack Denton at jack.denton@dowjones.com