Benzinga - by Shanthi Rexaline, Benzinga Editor.
Early Tuesday futures trading suggested a pause after the tech-driven rally of the previous session. Global cues were negative, with Asian markets retreating and European markets opening lower. Commodities dipped, and bond yields remained flat.
Traders may be cautious until Nvidia Corp. (NASDAQ:NVDA) releases its earnings, as analysts widely expect the AI leader to surpass ambitious targets. Additionally, a series of Fed speeches scheduled for today could provide further direction for the market.
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.07% |
| S&P 500 | +0.05% |
| Dow | +0.03% |
| R2K | -0.36% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) edged up 0.10% to $530.10, while the Invesco QQQ ETF (NASDAQ:QQQ) traded down 0.07% at $454.58 according to Benzinga Pro data.
Cues From Previous Session
Optimistic assessment of the market’s trajectory by strategists and momentum helped the market to start on a positive note on Monday. IT stocks rallied hard ahead of Nvidia’s earnings, helping the Nasdaq Composite to sustain the gains through the session and end at a new record.
The S&P 500 Index and the Dow Jones Industrial Average gave back their gains throughout the session. The former closed barely in the green, while the latter ended moderately lower. In the process, the Dow dropped below the 40,000 mark and the S&P 500 ended just shy of its all-time highs.
Consumer and financial stocks served as the biggest drags.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.65% | 16,794.87 |
| S&P 500 Index | +0.09% | 5,308.13 |
| Dow Industrials | -0.49% | 39,806.77 |
| Russell 2000 | +0.32% | 2,102.50 |
Insights From Analysts:
Despite the buoyancy seen in the market, an economist sounded a note of caution. Wharton professor Jeremy Siegel, Senior Economist to WisdomTree, said in his weekly commentary going by the technicals, there is strong momentum that supports further gains in the short term.
But he noted that fundamentals, particularly recent real data, paint a mixed picture.
“I wouldn't bet against the technical strength winning out in the short run,” he said. “But it is important to monitor these fundamental economic developments closely, as they will play a crucial role in shaping the market expectations and central bank policies in the coming months.”
Pointing to the gains by iShares Russell 2000 ETF (NYSE:IWM), Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), Fund Strat’s Tom Lee said the market rally is broadening and cash is pulled out of the sidelines. The strategist predicted Friday that irrespective of Nvidia’s quarterly report, the rally will likely broaden.
Upcoming Economic Data:
Among the Fed speakers scheduled to make public appearances are:
- Fed Governor Christopher Waller, Richmond Fed President Thomas Barkin: 9 a.m. EDT
- New York Fed President John Williams: 9:05 a.m. EDT
- Fed Vice Chair for Supervision Michael Barr: 11:45 a.m. EDT
- Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, and Boston Fed President Susan Collins to take part in a panel discussion: at 7 p.m. EDT
Stocks In Focus:
- Palo Alto Networks, Inc. (NASDAQ:PANW) fell over 7.70% in premarket trading following its quarterly results announcement, and Zoom Video Communications, Inc. (NASDAQ:ZM) fell over 2%.
- Lowe’s Companies, Inc. (NYSE:LOW) added over 2% after its earnings release.
- AutoZone, Inc. (NYSE:AZO) and Macy’s, Inc. (NYSE:M) are among the other notable companies reporting before the market opens.
- Those reporting after the close include Toll Brothers, Inc. (NYSE:TOL), Viasat, Inc. (NASDAQ:VSAT), and Urban Outfitters, Inc. (NASDAQ:URBN).
Crude oil futures fell for a second straight session and traded just above $78-a-barrel and gold futures were also weak but held above the $2,400-an-ounce mark. The U.S. 10-year note yield fell 1.1 basis points to 4.426%.
Bitcoin rallied strongly past the $71,000 level and Ethereum jumped nearly 20% amid speculation that an Ethereum spot ETF could be approved by the SEC.
The major stock markets in Asia were in a sea of red, although the selling pressure was more muted. Hong Kong’s Hang Seng Index fell over 2% amid a sell-off in electric vehicle and technology stocks. The pullback also reflected profit-taking after a string of gains in the regional markets.
European stocks also started Tuesday’s session on a weak note.
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