Markets

U.S. Stocks May Move Back To The Downside In Early Trading

(RTTNews) - Following the substantial rebound seen over the course of the previous session, stocks may move back to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 316 points.

Lingering concerns about the outlook for monetary policy may contribute to initial weakness as the Federal Reserve's two-day meeting gets underway.

The Fed is likely to leave interest rates unchanged when announcing its decision on Wednesday, although the accompanying statement could hint at the first rate hike as early as the next meeting in mid-March.

CME Group's FedWatch Tool is currently indicating an 84.8 percent chance that the Fed will raise interest rates by a quarter point in March.

A drop by shares of Johnson & Johnson (JNJ) may also weigh on the Dow in early trading, with the healthcare giant moving lower in pre-market trading after reporting fourth quarter earnings that beat estimates but weaker than expected sales.

Shares of General Electric (GE) are also seeing considerable pre-market weakness after the conglomerate reported mixed fourth quarter results.

On the other hand, shares of IBM Corp. (IBM) may move to the upside after the tech giant reported fourth quarter results that beat analyst estimates on both the top and bottom lines.

Not long after the start of trading, the Conference Board is due to release its report on consumer confidence in the month of January. The consumer confidence index is expected to drop to 111.9 in January from 115.8 in December.

Stocks showed a substantial turnaround over the course of the trading session on Monday, recovering strongly after another sell-off. The major averages all bounced well off their lows of the session and into positive territory.

The Dow was down more than 1,000 points at its worst levels but ended the day up by 99.13 points or 0.3 percent at 34,364.50. The blue chip index rebounded after hitting its lowest intraday level in over nine months.

The Nasdaq and the S&P 500 also showed significant rebounds after hitting multi-month lows. After plunging by as much as 4.9 percent, the Nasdaq climbed 86.21 points or 0.6 percent to 13,855.13, while the S&P 500 rose 12.19 points or 0.3 percent to 4,410.13 after dipping into correction territory.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan's Nikkei 225 Index tumbled by 1.7 percent, while China's Shanghai Composite Index plunged by 2.6 percent.

Meanwhile, the major European markets have rebounded following recent weakness. While the German DAX Index has risen by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.8 percent.

In commodities trading, crude oil futures are rising $0.26 to $83.57 a barrel after tumbling $1.83 to $83.31 a barrel on Monday. Meanwhile, after climbing $9.90 to $1,841.70 an ounce in the previous session, gold futures are unchanged.

On the currency front, the U.S. dollar is trading at 113.94 yen compared to the 113.95 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1276 compared to yesterday's $1.1326.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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