(RTTNews) - After ending the previous session well off their worst levels but still mostly lower, stocks may see further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.5 percent.
Technology stocks may see further downside amid concerns about valuations following the recent surge to record highs.
The downward momentum for the tech sector comes as traders look ahead to the release of Nvidia's (NVDA) first quarter results after the close of trading on Wednesday.
With Nvidia seen as a leader in the artificial intelligence space, the company's results and guidance could have a significant impact on the outlook for the markets.
Traders also continue to express concerns about elevated oil prices and a recent spike in treasury yields, although oil prices and yields are giving back some ground this morning.
"While the Nasdaq remains near highs and the broader AI trade is still intact, recent sessions have seen some profit-taking in semiconductors and mega-cap tech as yields rise and positioning looks increasingly stretched," said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, "The market is not abandoning the earnings and AI story but the combination of higher oil, higher yields and extremely strong positioning is making it harder for the sector to continue its near-vertical ascent without pauses or pullbacks."
Not long after the start of trading, the National Association of Realtors is scheduled to release its report on pending home sales in the month of April. Pending home sales are expected to increase by 0.9 percent in April after jumping by 1.5 percent in March.
Following the sharp pullback seen during last Friday's session, stocks saw continued weakness throughout much of the trading day on Monday but managed to regain some ground going into the end of the session.
The major averages climbed well off their worst levels of the day, with the Dow reaching positive territory. While the Dow climbed 159.95 points or 0.3 percent to 49,686.12, the S&P 500 edged down 5.45 points or 0.1percent to 7,403.05 and the Nasdaq slid 134.41 points or 0.5 percent to 26,090.73.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index advanced by 0.9 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index is up by 1.3 percent, the French CAC 40 Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.
In commodities trading, crude oil futures are falling $0.48 to $108.18 a barrel jumping surging $3.24 to $108.66 a barrel on Monday. Meanwhile, after slipping $3.90 to $4,558 ounce in the previous session, gold futures are dipping $12 to $4,546 an ounce.
On the currency front, the U.S. dollar is trading at 159.12 yen compared to the 158.83 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1618 compared to yesterday's $1.1655.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
