By Peter Nurse
Investing.com - U.S. stocks are seen opening higher Tuesday, with the tech-heavy Nasdaq Composite leading the way, helped by renewed confidence in the Federal Reserve retaining its ultra-easy monetary policy, while strong earnings from the retail sector again testify to the strength of consumer demand.
Large-cap retailers Walmart (NYSE:WMT) and Home Depot (NYSE:HD) reported blowout first quarters, helped by the last round of stimulus checks that put more money in consumers' pockets, while Macy’s (NYSE:M) raised its forecast for annual sales and earnings, betting on pent-up demand as shoppers return to its stores.
At 7:15 AM ET (1115 GMT), the Dow Futures contract was up 90 points, or 0.3%, S&P 500 Futures traded 11 points, or 0.3%, higher, and Nasdaq 100 Futures climbed 90 points, or 0.7%.
Growth-heavy tech stocks have been under pressure in recent sessions as investors fret over whether a surge in inflation will prompt the U.S. central bank to tighten monetary policy in near future.
However, Fed officials have been at pains of late to point out they see the surge in consumer prices as temporary. This commentary continued Monday, as Dallas Federal Reserve President Robert Kaplan said he doesn’t expect interest rates to rise until next year, while Federal Reserve Vice Chair Richard Clarida pointed to the recent disappointing jobs report as evidence monetary help was still required.
U.S. economic data Tuesday will center around the housing market, with April building permits and housing starts due. Overseas, the Eurozone economy shrunk by 0.6% in the first quarter of 2021, confirming a technical recession, while Japan’s recovery stalled last quarter, with gross domestic product shrinking an annualized 5.1% in the quarter.
Oil prices pushed higher Tuesday, with the Brent contract hitting $70 a barrel for the first time since March, as the major oil-consuming economies of the U.S. and Europe further reopen on the back of successful vaccination programs.
U.S. deaths from Covid-19 last week fell to their lowest in nearly 14 months and the number of new cases continued to decline for a fifth week in a row, prompting New York to lift the mask requirement for vaccinated people.
In Europe, the U.K. further relaxed restrictions and both Portugal and the Netherlands have opened up travel.
That said, worries still exist about the Covid-19 situation in India, the third largest consumer of oil in the world, as well as new outbreaks in other parts of Asia, including Taiwan and Singapore.
Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day, which is expected to show a 1.7 million-barrel rise in crude inventories.
U.S. crude futures traded 0.4% higher at $64.56 a barrel, while the Brent contract rose 0.6% to $67.85.
Additionally, gold futures rose 0.1% to $1,868.50/oz, while EUR/USD traded 0.5% higher at 1.2209, climbing to its highest level since late February.