U.S. Stocks May Move To The Downside Amid Economic Worries

Following the mixed performance seen in the previous session, stocks are likely to move mostly lower 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 0.3 percent.

Concerns about the outlook for the U.S. economy may weigh on the markets following yesterday’s disappointing manufacturing data.

While economic weakness could prompt the Federal Reserve to lower interest rates in the coming months, the central bank has signaled it plans to keep rates at elevated levels until there is greater confidence inflation is slowing.

A bigger than expected slowdown by the economy combined with high interest rates could prove troubling for stocks, which have recently reached record levels.

On Friday, the Labor Department is scheduled to release its closely watched monthly jobs report, which could have a significant impact on the outlook for the economy and interest rates.

Economists currently expect the report to show employment jumped by 190,000 jobs in May after climbing by 175,000 jobs in April, while the unemployment rate is expected to hold at 3.9 percent.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of April. Factory orders are expected to increase by 0.6 percent in April after jumping by 1.6 percent in March.

The Labor Department is also due to release its report on job openings in the month of April. Job openings are expected to decrease to 8.340 million in April from 8.488 million in March.

After a positive start and a subsequent retreat that resulted in a fairly long spell in negative territory on Monday, U.S. stocks recovered in afternoon trading and ended the day’s session on a mixed note.

The Nasdaq outperformed, settling at 16,828.67 with a gain of 93.65 points or 0.6 percent. The S&P 500 edged up 5.89 points or 0.1 percent to finish at 5,283.40, while the Dow ended down 115.29 points or 0.3 percent at 38,571.03.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index has slid by 0.6 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both down by 0.3 percent.

In commodities trading, crude oil futures are slumping $1.15 to $73.07 a barrel after plunging $2.77 to $74.22 a barrel on Monday. Meanwhile, after jumping $23.50 to $2,369.30 an ounce in the previous session, gold futures are falling $15 to $2,354.30 an ounce.

On the currency front, the U.S. dollar is trading at 154.82 yen compared to the 156.08 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0865 compared to yesterday’s $1.0904.