Stock futures tick higher on Tuesday morning

Equity futures rose slightly on Tuesday morning as worries about Covid cases in China kept investor sentiment under control.

Futures contracts linked to the Dow Jones Industrial Average climbed 59 points, or 0.17%. S&P 500 futures rose 0.15%, while Nasdaq 100 futures rose 0.03%.

China has seen its first deaths on the continent from Covid since May this weekend. That raised fears among investors that the country could reinstate restrictions meant to slow the spread of the virus, which would hurt business.

News out of China pushed investors away from growth stocks on Monday and into defensive sectors like health care and utilities, said David Waddell, CEO of Waddell & Associates. He said it also led to “reflexive” buying of US dollars, which put upward pressure on bond yields.

“On low volume days like today, the market becomes Pavlovian,” he said. “If you want to make sense of this market, watch the dollar.

Stocks are coming off a bearish session, with the Dow Jones losing 45 points, while the S&P 500 and Nasdaq Composite slipped 0.4% and 1.1%, respectively. Losses on the Dow Jones were subdued by a 6.3% gain on Disney following the return of Bob Iger as CEO.

On Tuesday, several Federal Reserve officials are expected to speak, including Kansas City Fed President Esther George and St. Louis Fed President James Bullard.

Upcoming economic reports include the Philadelphia Fed Non-Manufacturing Business Outlook Survey and the Richmond Fed Manufacturing Index.

Investors are also watching earnings reports from Dollar Tree, Best Buy, HP and Nordstrom.

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