Futures Pointing To Initial Pullback On Wall Street

The major U.S. index futures are currently pointing to a lower open on Tuesday, with stocks likely to give back ground after ending the previous session mostly higher.

U.S. stocks closed higher on Monday, with technology shares turning in a fine performance. The major averages all started off on a somewhat weak note in lackluster trading but turned positive, with stocks gaining in strength gradually as the session progressed.

The Dow ended higher by 50.66 points or 0.1 percent, at 39,169.52. The S&P 500 advanced 14.61 points or 0.3 percent to 5,475.09, while the Nasdaq climbed 146.70 points or 0.8 percent to 17,879.30.

Investors looked ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.

The report, which is expected to show a slowdown in the pace of job growth in the month of June, could impact the outlook for interest rates.

On the U.S. economic front, the Institute for Supply Management released a report showing manufacturing activity in the U.S. unexpectedly contracted at a slightly faster rate in the month of June.

The ISM said its manufacturing PMI edged down to 48.5 in June from 48.7 in May, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.1.

A separate report released by the Commerce Department unexpectedly showed a slight decrease in U.S. construction spending in the month of May.

The Commerce Department said construction spending edged down by 0.1 percent to an annual rate of $2.140 trillion in May after rising by 0.3 percent to a revised rate of $2.142 billion in April.

Economists had expected construction spending to inch up by 0.1 percent compared to the 0.1 percent dip originally reported for the previous month.

Microsoft Corporation shares gained about 2.2 percent. Apple Inc climbed nearly 3 percent. Amazon surged 2 percent. Nvidia and Alphabet posted modest gains.

Tesla Inc surged more than 6 percent, ahead of its second-quarter delivery numbers expected on Tuesday.

JP Morgan Chase, Eli Lilly, Oracle Corporation, Merck, Wells Fargo, T-Mobile, Verizon Communications, Morgan Stanley, IBM, Goldman Sachs, Nike and Boeing gained 1 to 3 percent.

ADP, Analog Devices, Honeywell International, Blackstone, Uber Technologies, Comcast Corporation, Caterpillar, Walt Disney, Home Depot, Procter & Gamble and Advanced Micro Devices ended notably lower.

Commodity, Currency Markets

Crude oil futures are climbing $0.88 to $84.26 a barrel after surging $1.84 to $83.38 a barrel on Monday. Meanwhile, after edging down $0.70 to $2,338.90 an ounce in the previous session, gold futures are falling $7.50 to $2,331.40 an ounce.

On the currency front, the U.S. dollar is trading at 161.48 yen compared to the 161.46 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0728 compared to yesterday’s $1.0740.

Asia

Asian stocks ended mixed on Tuesday as investors pondered what the U.S. Supreme Court’s immunity decision meant for former president Donald Trump.

The dollar gained traction and yields hit a one-month high after the Supreme Court ruled that presidents have absolute immunity from prosecution for core official acts. President Joe Biden said the high court’s ruling had undermined the rule of law.

There’s growing talk about a potential Trump presidency, leading to a steeper yield curve as growth will likely slow and inflation quicken under such a scenario, according to Morgan Stanley. Barclays and Nomura also issued calls to factor in a Trump win.

The dollar’s strength weighed on gold prices in Asian trading, while oil maintained positive momentum to trade around two-month highs due to concerns about conflict in the Middle East and expectations of strong U.S. demand.

Chinese and Hong Kong markets advanced after data showed the downturn in China’s residential real estate sector slowed further in June.

China’s Shanghai Composite index finished marginally higher at 2,997.01 after a choppy session. Hong Kong’s Hang Seng Index rose 0.3 percent to 17,769.14 as trading resumed after a holiday.

Japanese markets led regional gains, with exporters surging as the yen hit a new 37-year low versus the dollar.

The Nikkei 225 Index rallied 1.1 percent to 40,074.69, closing above the 40,000 threshold for the first time in three months. The broader Topix Index settled 1.2 percent higher at 2,856.62.

Nintendo added 1.4 percent after the gaming giant said the best way to stop scalping of the Switch’s successor is to make enough of them in the first place.

Seoul stocks fell notably as investors awaited Fed Chair Jerome Powell’s comments and the release of key U.S. economic data for more clarity on the Fed’s rate trajectory. The Kospi slid 0.8 percent to 2,780.86, snapping a two-session winning streak.

Australian markets ended lower as the minutes of the Reserve Bank’s June policy meeting showed that the “board judged the case for holding rates steady stronger than for hiking.”

The benchmark S&P/ASX 200 Index dropped 0.4 percent to 7,718.20, with miners and financials pacing the declines. The broader All Ordinaries Index fell 0.4 percent to 7,959.70.

Rising oil prices boosted energy stocks, with Woodside Energy rallying 3.1 percent. Liontown Resources soared 7.3 percent on the back of a $250 million investment from LG Energy Solution.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index ended the session down 0.1 percent at 11,776.73.

Europe

European stocks have drifted lower on Tuesday, tracking a rise in U.S. Treasury yields after the U.S. Supreme Court ruled that former President Donald Trump is entitled to immunity from federal prosecution for official actions he took while in office.

The landmark decision at the height of an election season stoked speculation about the possibility of another Trump presidency after last week’s poor debate performance by incumbent Joe Biden.

Meanwhile, headline inflation in the euro area dipped to 2.5 percent in June, the European Union’s statistics agency said, matching expectations.

The unemployment rate in the Eurozone stood at 6.4 percent in May, unchanged from April’s reading, Eurostat said in another report.

While the German DAX Index has slumped by 1.2 percent, the French CAC 40 Index is down by 0.8 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.

Ryanair Holdings has moved to the downside in Dublin despite the budget airline reporting record passenger numbers for June.

J Sainsbury has also fallen in London after the supermarket chain flagged that adverse weather had weighed on recent volume growth.

Food services and facilities management firm Sodexo S.A. has plunged in Paris after third quarter sales lagged expectations.

U.S. Economic News

Federal Reserve Chair Jerome Powell is due to participate in a policy panel before the European Central Bank Forum on Central Banking 2024 at 9:30 am ET.

At 10 am ET, the Labor Department is scheduled to release its report on job openings in the month of May. Job openings are expected to decrease to 7.91 million in May from 8.06 million in April.