Futures Pointing To Modestly Higher Open On Wall Street

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to move to the upside following the mixed performance seen in the previous session.

Stocks may benefit from optimism about the outlook for interest rates ahead of several key economic events this week.

However, early trading is likely to be impacted by reaction to remarks by Federal Reserve Chair Jerome Powell, who is due to deliver his semi-annual monetary policy testimony before the Senate Banking Committee this morning.

Powell is also scheduled to testify before the House Financial Services Committee on Wednesday, with his remarks potentially having a significant impact on the outlook for rates.

Later in the week, the Labor Department is scheduled to release reports on consumer and producer price inflation, which could have an even more profound impact on interest rate expectations.

If the report on consumer prices shows an expected slowdown in the annual rate of price growth, it could bolster optimism about a rate cut in September.

U.S. stocks ended mixed on Monday, turning a bit sluggish after a fairly good start. Among the major averages, the Nasdaq and the S&P 500 moved on to new record highs, while the Dow ended in negative territory.

The Dow edged down 31.08 points or 0.1 percent to 39,344.79. The S&P 500 ended higher by 5.66 points or 0.1 percent to 5,572.85, while the Nasdaq rose 50.98 points or 0.3 percent to 18,403.74.

Optimism about the outlook for interest rates aided stocks earlier in the session. However, the mood turned a bit cautious as the day progressed, with investors looking ahead to the data on consumer and producer prices and Powell’s congressional testimony this week.

On the economic front, a leading indicator for payroll employment in the U.S. decreased in June, extending the declining trend over the past several months, and a signaled a slowdown in payroll hiring in the second half of the year, survey data from the Conference Board showed.

The Conference Board Employment Trends Index fell to 110.27 in June from a downwardly revised 111.04 in May.

Networking stocks found good support. Shares of semiconductor and hardware companies also moved higher, contributing significantly to the gain by the Nasdaq.

Nvidia gained nearly 2 percent. Advanced Micro Devices Inc. shares rallied 4 percent. Intel surged more than 6 percent, and Dell Technologies climbed 5 percent.

Broadcom Inc., Home Depot, Qualcomm, Applied Materials, Texas Instruments, GE Aerospace, Morgan Stanley, IBM, Booking Holdings Inc., Citigroup, Vertex Pharmaceuticals, Lowe’s and Analog Devices also closed notably higher.

Meanwhile, Nike, Comcast Corporation, Abott Laboratories, McDonald’s Corporation, Cisco Systems, Wells Fargo, PepsiCo, Coca-Cola, Visa and Meta Platforms ended weak.

Commodity, Currency Markets

Crude oil futures are slipping $0.43 to $81.90 a barrel after sliding $0.83 to $82.33 a barrel on Monday. Meanwhile, after plunging $34.20 to $2363.50 an ounce in the previous session, gold futures are inching up $3.90 to $2,367.40 an ounce.

On the currency front, the U.S. dollar is trading at 161.08 yen compared to the 160.83 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0813 compared to yesterday’s $1.0824.

Asia

Asian stocks rose broadly on Tuesday after Wall Street equities inched higher to close at record peaks overnight ahead of the Federal Reserve Chair’s testimony and key U.S. consumer and producer price inflation figures due this week.

Investors expect the upcoming U.S. earnings season to be a good one, with top banks JPMorgan, Citigroup and Wells Fargo due to report their quarterly results on Friday.

Fed Chair Jerome Powell addresses Congress on Tuesday and Wednesday, with investors seeking more clues on the likely direction of rates ahead of a policy meeting later this month.

The U.S. CPI report is due on Thursday and is expected to show inflation easing to 3.1 percent in June from 3.3 percent in May. The producer price inflation report is due Friday.

The U.S. dollar remained near a multi-week low against key peers in Asian trading and gold traded marginally higher above $2,360 per ounce, while oil extended losses amid continued hopes for a ceasefire deal in Gaza.

Chinese markets posted strong gains, with the benchmark Shanghai Composite Index jumping 1.3 percent to 2,959.37 ahead of one of the country’s biggest annual policy meetings.

Hong Kong’s Hang Seng Index finished marginally lower at 17,523.23, reversing early losses before the release of Chinese inflation data.

Japanese markets led regional gains, with chip-related shares leading the surge. The Nikkei 225 Index shot up 2.0 percent to hit a record high of 41,580.17 as the yen declined ahead of Powell’s testimony.

The broader Topix Index settled 1.0 percent higher at 2,895.55. Advantest, Tokyo Electron, Screen Holdings and SoftBank Corp. surged 2-3 percent.

Seoul stocks eked out modest gains as tech shares followed their U.S peers higher. The Kospi rose 0.3 percent to 2,867.38.

SK Hynix advanced 2.1 percent, while automaker Hyundai Motor tumbled 3 percent and Kia Corp. dropped 1.4 percent.

Australian stocks ended notably higher in a broad-based rally. The benchmark S&P/ASX 200 Index advanced 0.9 percent to 7,829.70, while the broader All Ordinaries Index climbed 0.8 percent to 8,075.20.

Banks outperformed, with Commonwealth Bank of Australia rising 1.8 percent to a record high. Buy now-pay later firm Zip gained 4.3 percent and telecom firm Telstra advanced 2.2 percent.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index jumped 0.9 percent to 11,848.13, marking a three-week high ahead of the RBNZ policy meeting on Wednesday.

Europe

European stocks have declined on Tuesday, as investors react to a slew of disappointing corporate updates and look ahead to a crucial testimony from Federal Reserve Chair Jerome Powell before a congressional panel for additional clues on the interest rate trajectory.

While the French CAC 40 Index has slumped by 0.9 percent, the German DAX Index is down by 0.5 percent and the U.K.’s FTSE 100 Index is down by 0.3 percent.

In corporate news, Saint-Gobain has moved to the downside in Paris after announcing it has completed the acquisition of CSR.

Software company Dassault Systemes has also moved sharply lower on the day after cutting its 2024 earnings target.

PageGroup shares have also slumped in London after the recruiter warned that earnings this year will probably drop about 50 percent.

BP has also declined. The energy giant has warned of “significantly lower” refining margins and flagged impairment of $1 billion to $2 billion on the value of a plant in Germany.

Drug maker Indivior has also plunged to about three-year lows after a profit warning.

U.S. Economic News

Federal Reserve Vice Chair for Supervision Michael Barr is scheduled to speak before the Financial Inclusion Practices and Innovations Conference hosted by the Federal Reserve Board at 9:15 am ET.

At 10 am ET, Federal Reserve Chair Jerome Powell is due to deliver his semi-annual monetary policy testimony before the Senate Banking Committee.

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

At 1:30 pm ET, Federal Reserve Board Governor Michelle Bowman is due to speak before the Financial Inclusion Practices and Innovations Conference.