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In the past, the world’s markets moved in harmony. Whereas a steep decline in the Chinese stock market overnight would parlay into a bad day for the US markets. For the time being, that does not apply.

With the iShares China Large-Cap ETF (ARCX: FXI) down over 10% following the confirmation of a third regime for Xi Jinping, the S&P 500 index futures rebounded sharply from their premarket low. In fact, it turned a 27-handle decline into a 30-plus handle gain between 4-8 AM EST. Whether or not that inverse relationship will hold up in the long term is yet to be determined.

When the continuation rally off the opening bell failed, the index had a sharp decline that took it from in the green by nearly 50 handles to in the red by 12. However, the decline found support ahead of the premarket low just before 10:30 AM EST and the bulls reasserted control. 

Once the index stabilized over the closing price, it was a steady stream of buyers into the close. As a result, the index added 45.25 handles to close at 3809.25, which is the highest close so far for the month.

The move into value tech stocks was best exhibited by Microsoft Inc. (NASDAQ: MSFT) being the biggest winner of the top components of the index. For the session, the issue added $5.13 or 2.1% to close at $247.25

That was just over one percent better than the cash index’s advance of 1.20%.

Tesla Inc. (NASDAQ: TSLA) investors are showing their dissatisfaction over the Twitter Inc. (NYSE: TWTR) deal, making it the biggest loser of the top components of the index. For the session, the issue declined by $3.19 or 1.5% to close at $211.25.


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