Benzinga - by Shanthi Rexaline, Benzinga Editor. The purchasing momentum observed in the broader market on Monday is expected to spill over into Tuesday’s session. Investors are hoping for optimistic remarks from Federal Reserve Chair Jerome Powell, who is scheduled to address the Jackson Hole Symposium on Friday. Additionally, traders are preparing for a robust quarterly report from Nvidia Corp. (NASDAQ:NVDA). Additionally, insights from a housing market report and several Federal Reserve speeches might provide guidance for the day’s trading activities.
Cues From Monday's Trading:
Oversold levels triggered some bargain buying on Tuesday, as traders ignored rising bond yields and piled into tech and growth stocks. The blue-chip and small-cap stocks, however, experienced weakness.
The major averages opened uniformly higher but reversed course immediately after. After giving back some of the gains through the morning session, the tech-heavy Nasdaq Composite Index rose further in the afternoon before closing solidly higher. Thus, it snapped a four-session losing streak. The S&P 500 Index also followed a similar trajectory but fell below the flat line by the mid-session before staging a recovery.
The 30-stock Dow Industrials Average and the small-cap Russell 2,000 Index languished mostly below the unchanged line before meandering to a lower finish.
IT, IT services, communication services and consumer discretionary stocks advanced solidly in the session, while real estate, utility, energy and consumer staple stocks experienced weakness.
US Index Performance On Monday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.56% | 13,497.59 |
| S&P 500 Index | +0.69% | 4,399.77 |
| Dow Industrials | -0.11% | 34,463.69 |
| Russell 2000 | -0.18% | 1,856.01 |
Analyst Color:
“Don't panic, pullbacks are completely normal within a bull market,” says LPL Financial Chief Technical Strategist Adam Turnquist.
"With volatility comes opportunity, and as valuations reset, overbought conditions recede, and support is found, we believe a buying opportunity back into this bull market will present itself over the coming months,” the analyst said.
Delving into the reasons for the recent pullback, Turnquist said the recent jump in bond yields proved to be “too much, too fast” for stocks to absorb, especially for the heavyweight and longer-duration technology sector. He also blamed deteriorating economic conditions in China and weak seasonal trends for the sell-off.
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.50% |
| S&P 500 | +0.39% |
| Dow | +0.22% |
| R2K | +0.49% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.39% to $441.07 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.52% to $365.79, according to Benzinga Pro data.
Upcoming Economic Data:
Richmond Fed President Thomas Barkin, a member of the rate-setting Federal Open Market Committee, is scheduled to speak at 7:30 a.m. EDT.
The National Association of Realtors will release its existing home sales report for July at 10 a.m. EDT. Economists expect existing home sales to remain almost flat at 4.15 million units compared to June's 4.16 million units. This is notably lower than the 6.7 million+ units sold in late 2020.
The Richmond Fed is due to release its manufacturing and services indices for August at 10 a.m. EDT. The indices are expected to come in at -7 and -4, respectively compared to July's -9 and -2.
Chicago Fed President Austan Goolsbee is scheduled to speak at 2:30 p.m. EDT and Fed Governor Michelle Bowman, also a FOMC member, will speak at 2:30 p.m. EDT.
See also: Best Strategies For Futures Trading
Stocks In Focus:
- Zoom Video Communications, Inc. (NASDAQ:ZM) rose over 4% in premarket trading following its quarterly results announcement.
- Baidu, Inc. (NASDAQ:BIDU) climbed about 4.50% in reaction to its results.
- Tesla, Inc. (NASDAQ:TSLA) rose over 3% and Nvidia added about 2%, extending the momentum from Monday.
- BJ's Wholesale Club Holdings, Inc. (NYSE:BJ), Canadian Solar, Inc. (NASDAQ:CSIQ), Coty, Inc. (NYSE:COTY) and Dick's Sporting Goods, Inc. (NYSE:DKS), Macy's, Inc. (NYSE:M) and Medtronic plc (NYSE:MDT) are among the companies releasing their quarterly results before the market open.
- Those reporting after the close include Toll Brothers, Inc. (NYSE:TOL), Urban Outfitters, Inc. (NASDAQ:URBN) and La-Z-Boy, Inc. (NYSE:LZB).
Crude oil futures slipped 0.21% to $79.95 in early European session on Tuesday after pulling back 0.65% on Monday.
The benchmark 10-year Treasury note edged down 0.032 percentage points to 4.31% after it spiked to 4.342 on Monday.
The Asian markets ended Tuesday's session firmly in the green, as they took cues from the strength in U.S. tech stocks overnight. European stocks firmed up in late-morning trading on Tuesday.
Read Next: Risk-Free 10-Year Bond Promises 53% Gain: Stocks Brace For Impact
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