U.S. stock index futures climbed on Tuesday as investors returned from a long weekend to scoop up shares of megacap growth companies and banks that were hammered in a rout last week on worries over a global economic downturn.
Each of the three major Wall Street indexes fell for the third week in a row amid heightened volatility, while the S&P 500 index suffered on Friday its biggest weekly percentage drop since March 2020 following the Federal Reserve's largest rate increase in nearly three decades.
Markets have priced in aggressive rate hikes by the U.S. central bank in July and September to battle surging inflation, with some investors growing wary about whether the Fed can engineer a soft landing for the economy and avoid a recession.
Goldman Sachs now sees a 30% chance of the U.S. economy tipping into recession over the next year, up from its previous forecast of 15%.
All eyes are now on Fed Chair Jerome Powell's testimony to the Senate Banking Committee on Wednesday for clues on future interest rate hikes.
At 6:10 a.m. ET, Dow e-minis were up 492 points, or 1.65%, S&P 500 e-minis were up 67 points, or 1.82%, and Nasdaq 100 e-minis were up 207.5 points, or 1.84%.
The S&P 500 and the tech-heavy Nasdaq are already in bear market, with the former down 23.4% from its record closing high on Jan. 3. Markets were closed on Monday for Juneteenth holiday.
Megacap technology and growth stocks Microsoft Corp , Meta Platforms, Apple Inc, Alphabet Inc, Amazon.com and Tesla Inc rose between 1.4% and 3.1% in premarket trading.
Wells Fargo added 2.4% to lead gains among big banks.
Exxon Mobil Corp firmed 3.2% after QatarEnergy signed a deal with the oil major for the Gulf state's North Field East expansion, the world's largest liquefied natural gas project.
Spirit Airlines jumped 12.7% as JetBlue Airways sweetened its bid to convince the ultra-low cost carrier to accept its offer over rival Frontier Airlines' proposal.
(Reporting by Devik Jain in Bengaluru; Editing by Sriraj Kalluvila)