Benzinga - by Shanthi Rexaline, Benzinga Editor.
The market outlook remains uncertain, with stock index futures indicating a modestly lower opening on Tuesday. Apple Inc. (NASDAQ:AAPL) may offer support to the tech sector, but Oracle Corp.’s (NYSE:ORCL) negative guidance weighs on sentiment. Traders are expected to be cautious ahead of the August consumer price inflation report, which holds significance for the data-dependent Federal Reserve, set to discuss monetary policy next week.
Cues From Monday’s Trading:
Fueled by strength in the tech sector, major indices closed higher on Monday. The session started with significant gains, driven by strong performances from heavyweights like Tesla, Inc. (NASDAQ:TSLA). Although optimism waned during the day, indices remained above the break-even point.
The positive sentiment was partly attributed to the New York Fed’s inflation expectations, which showed a 0.1 percentage point increase in the one-year reading to 3.6%. Measures of longer-term inflation suggested a slowdown.
The Nasdaq Composite and S&P 500 recorded consecutive gains, while the Dow Industrials Average notched its third consecutive session of gains.
US Index Performance On Monday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.14% | 13,917.89 |
| S&P 500 Index | +0.67% | 4,487.46 |
| Dow Industrials | +0.25% | 34,663.72 |
| Russell 2000 | +0.19% | 1,855.14 |
Analyst Color:
Fund Strat on Monday made a bold call for gains this week. “We believe weakness in September was front-loaded. So we see higher probabilities of gains this week,” the firm said in its weekly commentary
“The market has again become a "game of inches" where investors need to be tactically mindful,” the firm’s Head of Research Tom Lee said.
“Our constructive stance on markets remains intact,” he said, basing his view on its expectation of inflation cooling by more than the consensus estimates and the Fed likely shifting away from “data dependency” toward looking at more forward measures.
“But we still see equity markets higher by year-end and once we are through this continued chop, we see S&P 500 rising to 4,750 or greater by year-end,” Lee added.
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.29% |
| S&P 500 | -0.26% |
| Dow | -0.18% |
| R2K | -0.05% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was down 0.21% to $447.49, and the Invesco QQQ ETF (NASDAQ:QQQ) moved down 0.20% to $376.23, according to Benzinga Pro data.
Upcoming Economic Data:
OPEC is scheduled to release its monthly oil market report at 7 a.m. EDT.
The Energy Information Administration will release its short-term energy outlook report at 12 p.m. EDT.
The Treasury is due to auction 10-year notes at 1 p.m. EDT.
See also: Futures Vs. Options
Stocks In Focus:
- Oracle fell over 9% in premarket trading after the database giant’s guidance fell short of expectations.
- Apple shares are in focus ahead of its “Wonderlust” iPhone launch event.
- Tesla fell about 0.70% following the stock’s 10%+ gain on Monday.
- WestRock Company (NYSE:WRK) jumped 6.60% after it announced a deal to be bought by European corrugated packaging company Smurfit Kappa.
Crude oil futures rose 0.81% to $88 in early European session on Tuesday following Monday's modest 0.37% advance.
The benchmark 10-year Treasury note edged down 0.01 percentage points to 4.278% on Tuesday.
The Asian market witnessed a muted performance on Tuesday as traders moved to the sidelines ahead of the U.S. inflation data. The Japanese, Indian, Australian, and Taiwanese markets advanced, while most other markets ended lower for the session.
The major domestic currencies gained ground against the dollar as the Bank of Japan and the Chinese central bank talked up their currencies.
European stocks traded mixed by late trading on Tuesday, with the U.K.’s FTSE 100 Index advancing, while the German and French markets moved to the downside. The STOXX Euro 600 Index, a measure of pan-European market performance, edged down.
Stocks in the region rose solidly on Monday amid risk-on sentiment, with material stocks leading the gains.
Read Next: Dimon Pours Cold Water On US Economic Optimism, Flags Global Tensions, Financial Shifts
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