U.S. Stocks May See Further Downside In Early Trading

(RTTNews) - After ending the previous session modestly lower, stocks may see further downside in early trading on Tuesday. The major index futures are currently pointing to initial weakness on Wall Street, with the S&P 500 futures down by 0.4 percent.

Traders may continue to cash in on recent strength in the markets, which lifted the S&P 500 and the Nasdaq to record closing highs last Friday.

Uncertainty about the outlook for interest rates may also weigh on the markets ahead of congressional testimony by Federal Reserve Chair Jerome Powell

Powell is due to testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.

The Fed chief is likely to reiterate recent comments stressing the central bank needs greater confidence inflation is slowing before cutting interest rates.

The next monetary policy meeting is scheduled for March 19-20, with the Fed widely expected to leave interest rates unchanged.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of February.

The ISM's services PMI is expected to edge down to 53.0 in February after climbing to 53.4 in January, although a reading above 50 would still indicate growth.

Additionally, the Commerce Department is due to release its report on new orders for manufactured goods in the month of January. Factory orders are expected to tumble by 2.9 percent.

After a weak start and a long spell in negative territory, U.S. stocks briefly managed to turn positive in the final hour of trading on Monday but failed to find support and ended marginally lower.

The mood was cautious throughout the day's session due to a lack of major U.S. economic data. Traders largely stayed on the sidelines ahead of a several key events this week.

The major averages all ended in negative territory. The Dow ended down 97.55 points or 0.3 percent at 38,989.83. The S&P 500 settled with a loss of 6.13 points or 0.1 percent at 5,130.95, while the Nasdaq ended lower by 67.43 points or 0.4 percent at 16,207.51.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index closed just below the unchanged line, while Hong Kong's Hang Seng Index plunged by 2.6 percent.

The major European markets have also shown modest moves to the downside on the day. While the French CAC 40 Index has edged down by 0.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index are marginally lower.

In commodities trading, crude oil futures are slumping $1.08 to $77.66 a barrel after tumbling $1.23 to $78.74 a barrel on Monday. Meanwhile, after surging $30.60 to $2,126.30 an ounce in the previous session, gold futures are climbing $12.50 to $2,138.80 an ounce.

On the currency front, the U.S. dollar is trading at 150.15 yen compared to the 150.53 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0849 compared to yesterday's $1.0856.

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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