U.S. Futures Slide After S&P 500 Stages Best Comeback Since 2009

© Bloomberg. Pedestrians pass in front of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Nov. 26, 2018. Beaten-down tech shares led the rebound in U.S. stocks, while Treasuries fell as investors gained confidence from positive political developments in Europe and rising oil prices. Photographer: Jordan Sirek/Bloomberg

(Bloomberg) -- U.S. stock-index futures fell on Thursday, suggesting investors aren’t prepared to build on the biggest rally in American equities since 2009.

S&P 500 Index futures contracts expiring in March fell as much as 0.6 percent after the underlying gauge rallied 5 percent Wednesday. Dow Jones Industrial Average and Nasdaq 100 index futures also dropped as much as 0.6 percent.

Equity bulls flooded the stock market stateside on a flurry of developments on Wednesday:

• A senior White House official assured investors that the Federal Reserve chairman won’t get fired, an action Bloomberg News reported over the weekend that President Donald Trump had discussed.
• Trump made unusually direct comments on the stock market Tuesday, saying shares were presenting “a tremendous opportunity to buy.”
• Energy producers added a fillip to U.S. stocks as oil rose above $46 a barrel in its strongest rally since 2016.
• And a report late in the session that a U.S. delegation will visit Beijing in early January for trade talks gave stocks a final push.

Wednesday’s rally is unlikely to be sustained as the “fundamentals haven’t shifted,” said Kyle Rodda, a Melbourne-based market analyst at IG Group Holdings (LON:IGG) Plc. “Markets are still nervous about how financial markets and the global economy will go during a cyclical slowdown without central bank support,” he said by phone.

History shows that not every miracle resurrection in equities is a dead cat bounce, though it is true that strong rallies are common in prolonged market slumps. In eight previous bear markets, the S&P 500 has experienced rallies of greater than 2.5 percent more than 120 times as the benchmark plunged from peak to trough, according to data compiled by Bloomberg.

A U.S. government shutdown and trade tensions between the world’s two largest economies are among reasons for investor caution.

“You’re going to get this push and pull in markets where there’ll be big up days and big down days because no one really can get a good grasp on where things ought to be at this point in time,” Rodda said.

Market Reaction

• S&P 500 Index March e-mini contracts down 0.5 percent as of 10:08 a.m. in Tokyo; underlying gauge down 11 percent for December.
• Dow Jones and Nasdaq 100 futures contracts down 0.5 percent each