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Stocks fall to start June as concerns mount about economic growth

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Stock futures were mostly higher Wednesday as Wall Street turned the page to another month following a volatile May.

Futures tied to the Dow Jones Industrial Average added 140 points, or 0.4%. S&P 500 futures rose 0.2%. Nasdaq 100 futures ticked up 0.1%.

The move in futures came after a down day for stocks, with the Dow falling 222.8 points in another choppy trading session to close out the month. The S&P 500 and Nasdaq Composite dipped 0.6% and 0.4%, respectively.

For the month of May, the Dow and S&P 500 finished little changed, after last week’s strong rally chipped away at long losing streaks for the indexes. The Nasdaq Composite underperformed, shedding more than 2%.

However, the ride for stock investors was far choppier than the month-end results suggest. The S&P 500 briefly dipped into bear market territory last month, trading more than 20% below a record at one point. The Nasdaq, meanwhile, is deep in a bear market — down 25.5% from an all-time high.

Traders pored over a raft of mixed quarterly results that included some big misses from bellwether names like Walmart.

Meanwhile, the Federal Reserve at the start of May hiked rates by 50 basis points to quell an inflationary surge not seen in decades.

The first day of June marks the start of the Fed’s plan to reduce its balance sheet, which ballooned to nearly $9 trillion during the Covid pandemic.

With the first-quarter earnings season nearly complete and the Fed having strongly signaled its rate hike intentions for its next two meetings, stocks could struggle for direction over the summer.

“It’s best to wait and see how the next quarter shakes out. When we get into late July, we’ll have a better picture. Until then, I think we’re going to see very much a choppy market with a bias towards falling further into a bear market,” said Max Gokhman, chief investment officer at AlphaTrAI.

One potential source of optimism for markets overnight is Salesforce, whose first-quarter results topped expectations. The stock rose more than 8% in premarket trading.

On Wednesday, investors will get an updated look at manufacturing and construction spending data.

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