Stress like it was 1987: Evercore's Julian Emanuel questions why rate hikes are still on the table

U.S. stock futures rose on Tuesday, with traders trying to regain their footing after the Dow Jones Industrial Average posted a fifth day of losses. Currency traders were also looking ahead to a key inflation report on Tuesday.

Dow Jones Industrial Average futures rose 159 points, or 0.5%. S&P 500 and Nasdaq 100 futures climbed 0.5% each.

Bank stocks recovered slightly after taking a beating during Monday’s trading session. The SPDR S&P Regional Banking ETF (KRE) rose more than 4% in premarket trading. Shares of First Republic Bank increased by 24% in expanded trade, after closing down nearly 62% on Monday. KeyCorp shares rose about 13% in a relief rally after a 27% decline.

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First Republic shares 1-day

On the Monday Dow fell after a plan to stop Silicon Valley Bank depositors failed to lift bank shares, as S&P 500. The Dow shed 90.50 points, or 0.28%, while the broad market index lost 0.15%.

The technology-heavy one Nasdaq Composite bucked the trend, rising 0.45%, as some investors bet that the collapse of Silicon Valley Bank could mean a pause in future rate hikes by the Federal Reserve.

“What we’ve seen this past week is the first shot across the bow in terms of the impact of tightening,” Evercore ISI’s Julian Emanuel said Monday on CNBC’s “Fast Money.”

“We’re going to have a recession … we think it’s likely to be mild, so that’s why we think you’re going to have a reexamination of the October lows, but eventually get the buying opportunity that we’ve been waiting for for almost two years now. That will launch the next bull market phase,” Emanuel said.

Investors await the latest inflation figures. Coming out on Tuesday before the clock is the February consumer price index expected to show a rise of 0.4% last month, according to Dow Jones consensus estimates. That’s down from a 0.5% increase the previous month.

Elsewhere, GitLab shares fell 32% in trading after the open source software company is issued weaker than expected first quarter and full-year income guidance.