Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to roughly flat open on Tuesday, with stocks likely to show a lack of direction after moving sharply higher over the past several sessions.

Traders may take a breather on the heels of the advance seen during Monday’s session, which extended the rally seen to close out the previous week.

The surge has lifted the major averages to their best levels in almost a month amid renewed optimism about the outlook for interest rates.

Relatively dovish comments from Federal Reserve Chair Jerome Powell combined with weaker-than-expected job growth in April have largely eliminated short-lived concerns the Fed might actually consider raising rates.

Investors have instead grown increasingly confident about a rate cut in the coming months, with the chances rates will be lower by September now at 83.5 percent, according to CME Group’s FedWatch Tool.

Among individual stocks, shares of Disney (DIS) are seeing significant pre-market weakness even though the entertainment giant reported better than expected fiscal third quarter earnings.

Stocks showed a strong move to the upside during trading on Monday, extending the rally seen to close out the previous week. With the continued advance, the major averages reached their best closing levels in almost a month.

The Nasdaq and the S&P 500 reached new highs for the session going into the close of trading, The Nasdaq surged 192.92 points or 1.2 percent to 16,349.25, the S&P 500 jumped 52.95 points or 1.0 percent to 5,180.74 and the Dow climbed 176.59 points or 0.5 percent to 38,862.27.

Stocks continued to benefit from the upward momentum seen over the two previous sessions, which partly reflected renewed optimism about the outlook for interest rates.

However, the upward move may have been exaggerated by light volume, as a lack of major U.S. economic data kepts some traders on the sidelines.

The economic calendar remains relatively quiet throughout the week, although a preliminary reading on consumer sentiment in May might attract some attention along with remarks by several Fed officials.

Among individual stocks, shares of Bausch + Lomb (BLCO) moved sharply higher on the day after Morgan Stanley upgraded its rating on the eye care company’s stock to Overweight from Equal Weight.

Media and entertainment giant Paramount Global (PARA) also surged after a report from the New York Times said the company decided to formally open negotiations with a bidding group led by Sony Pictures Entertainment and the private equity giant Apollo.

Meanwhile, shares of Spirit Airlines (SAVE) plummeted after the discount carrier reported a slightly wider than expected first quarter loss and provided disappointing second quarter revenue guidance.

Semiconductor stocks showed a substantial move to the upside over the course of the session, driving the Philadelphia Semiconductor Index up by 2.2 percent to its best closing level in almost a month.

Considerable strength was also visible among gold stocks, as reflected by the 2.2 percent surge by the NYSE Arca Gold Bugs Index. The rally by gold stocks came amid an increase by the price of the precious metal.

Computer hardware stocks also saw significant strength on the day, resulting in a 2.2 percent jump by the NYSE Arca Computer Hardware Index.

Software, brokerage and housing stocks also showed notable moves to the upside, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are slipping $0.30 to $78.18 a barrel after rising $0.37 to $78.48 a barrel on Monday. Meanwhile, after jumping $22.60 to $2,331.20 an ounce in the previous session, gold futures are edging down $7.80 to $2,323.40 an ounce.

On the currency front, the U.S. dollar is trading at 154.43 yen compared to the 153.92 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0775 compared to yesterday’s $1.0769.

Asia

Asian stocks advanced on Tuesday amid expectations that the U.S. Federal Reserve will start cutting interest rates later this year.

The yen was under pressure, helping lift Japanese markets to a three-week high. The Aussie dollar slipped and bonds rallied as the Reserve Bank of Australia held interest rates steady as widely expected and sounded less hawkish on the policy outlook than many had feared.

In China, data showed the country recorded high tourism figures during the Labour Day holiday, beating pre-pandemic levels.

Shenzhen and Wuhan have further eased home purchase restrictions to boost sales as the property market slump continued over the May Day public holiday.

Gold slipped in Asian trading following hawkish comments from a couple of Fed officials. Oil prices held steady as Israel rejected a statement from Hamas that it had accepted a cease-fire proposal to end the fighting in Gaza.

China’s Shanghai Composite Index closed up 0.2 percent at 3,147.74, reversing an early slide. Hong Kong’s Hang Seng Index dropped 0.5 percent to 18,479.37 after a 10-day winning streak.

Japanese markets rallied as trading resumed after a holiday. The Nikkei 225 Index jumped 1.6 percent to 38,835.10, marking a three-week closing high as the yen continued to weaken despite warnings from authorities that they would act in the event of volatility. The broader Topix Index settled 0.7 percent higher at 2,746.22.

Tech stocks topped the gainers list after Apple posted stronger-than-expected sales last quarter. Advantest rose 2.3 percent, SoftBank Group rallied 3.7 percent, Tokyo Electron jumped 5.2 percent and Disco Corp. soared 8.9 percent. Nikkei heavyweight Fast Retailing gained 3.2 percent.

A private survey showed earlier in the day that Japanese service sector activity grew at the fastest pace in eight months in April as a result of rising business and consumer spending.

Seoul stocks climbed, with the Kospi rallying 2.2 percent to 2,734.36 in catch-up trade as trading resumed after a long holiday weekend. Tech stocks surged, with Samsung Electronics gaining 4.8 percent and SK Hynix adding 3.7 percent.

Australian markets saw their biggest gain in three months after the RBA rate decision. The benchmark S&P ASX 200 Index surged 1.4 percent to 7,793.30 while the broader All Ordinaries Index closed up 1.4 percent at 8,065.50.

Gains were seen across the board. Power producer AGL Energy soared 7.4 percent after hiking its profit guidance for FY2024. Lender ANZ finished marginally higher despite first-half earnings coming in below estimates.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index slipped 0.2 percent to 11,800.78.

Europe

European stocks have moved mostly higher on Tuesday as investors react to mostly positive regional economic data and encouraging bank earnings.

German factory orders decreased 0.4 percent on a monthly basis in March, confounding expectations for an increase of 0.4 percent – according to data from Destatis. Nonetheless, the pace of decrease slowed from the revised 0.8 percent drop logged in February.

A separate set of data showed that German exports gained 0.9 percent on a monthly basis in March, reversing a 1.6 percent decrease in February.

Elsewhere, data from the customs office showed France’s trade deficit dropped to 5.47 billion euros in March from 5.61 billion euros in February as exports rose faster than imports.

In the U.K., data from the mortgage lender Halifax showed that house prices in the U.K. were steady in April after falling in March.

While the U.K.’s FTSE 100 Index has shot up by 1.1 percent, the German DAX Index is up by 0.6 percent and the French CAC 40 Index is up by 0.4 percent.

In corporate news, Swiss banking giant UBS Group AG has moved sharply higher as it returned to profit after two loss-making quarters.

UniCredit SpA has also rallied after Italy’s second biggest lender posted a much higher first quarter net income than expected and upgraded its net profit guidance for the year.

German semiconductor-maker Infineon Technologies AG has also surged despite cutting its revenue forecast in the current fiscal year.

Zalando has also soared. The online fashion retailer backed its full-year guidance after returning to growth in the first quarter.

Ferrexpo has also jumped. The Swiss iron ore company with assets in Ukraine issued an update on proceedings against its Ukrainian subsidiary Ferrexpo Poltava Mining.

The company said it has decided to make a partial payment of the bail approved by the Kyiv Court of Appeal on April 29 for Viktor Lotous, the General Director and Chair of the FPM Management Board, in connection with royalty related investigation.

Meanwhile, software developer TeamViewer has slumped after reporting first quarter revenue and earnings below estimates.

Health technology company Siemens Healthineers has also tumbled almost after its fiscal second quarter revenue missed expectations.

Valneva shares have also dropped in Paris. The biotech company recorded a turnaround to net income for the first quarter, supported by a net gain of 90.8 million euros from the sale of the priority review voucher.

U.S. Economic Reports

Minneapolis Federal Reserve President Neel Kashkari is due to participate in a moderated conversation on the economic overview before the Milken Institute 2024 Global Conference at 11:30 am ET.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $58 billion worth of three-year notes.

The Federal Reserve is due to release its report on consumer credit in the month of March at 3 pm ET. Consumer credit is expected to increase by $15.0 billion in March after climbing by $14.1 billion in February.

Stocks In Focus

Shares of Hims & Hers Health (HIMS) are moving sharply higher in pre-market trading after the telehealth company reported better than expected first quarter results and provided upbeat second quarter revenue guidance.

Apparel retailer Gap (GPS) is also likely to see initial strength after Citi upgraded its rating on the company’s stock to Buy from Neutral.

On the other hand, shares of Palantir Technologies (PLTR) may come under pressure after the data analytics company provided disappointing full-year revenue guidance.

Electric vehicle maker Lucid Group (LCID) is also seeing significant pre-market weakness after reporting a first quarter loss and reaffirming its disappointing 2024 production forecast.