Futures Pointing To Another Lackluster Session On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Tuesday, with stocks likely to extend the lackluster performance seen over the course of the previous session.

Traders may remain reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement could have a significant impact on the outlook for the central bank’s next decision in September.

With Fed officials repeatedly saying they need “greater confidence” inflation is slowing before cutting rates, recent inflation data has led to optimism about a September rate cut.

According to CME Group’s FedWatch Tool, there is currently a 91.6 percent chance the Fed will lower rates by a quarter point in September and an 8.3 percent chance of a half point rate cut.

Traders may also stick to sidelines ahead of the release of earnings news from companies like Microsoft (MSFT), Advanced Micro Devices (AMD) and Starbucks (SBUX) after the close of today’s trading.

Meanwhile, a steep drop by shares of Procter & Gamble (PG) may weigh on the Dow, with the consumer products giant plunging by 5.6 percent in pre-market trading.

The slump by Procter & Gamble comes after the company reported second quarter earnings that beat analyst estimates but weaker than expected revenues.

Fellow Dow component Merck (MRK) may also come under pressure after the drug giant reported better than expected second quarter results but provided disappointing full-year earnings guidance.

On the other hand, rival drug giant Pfizer (PFE), which was removed from the Dow back in 2020, is likely to see initial strength after reporting second quarter results that beat expectations and raising its full-year outlook.

Stocks moved to the upside early in the session on Monday but showed a lack of direction over the course of the trading day. The major averages spent the day bouncing back and forth across the unchanged line after posting strong gains last Friday.

The major averages eventually ended the session narrowly mixed. While the Dow edged down 49.41 points or 0.1 percent to 40,539.93, the Nasdaq inched up 12.32 points or 0.1 percent to 17,370.20 and the S&P 500 crept up 4.44 points or 0.1 percent to 5,463.54.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the Federal Reserve’s monetary policy meeting this week.

Later in the week, the focus is likely to shift to the Labor Department’s closely watched monthly jobs report for July.

Earlier in the day, stocks benefitted from optimism ahead of the release of earnings news from several major technology companies.

Microsoft (MSFT), Meta Platforms (META), Apple (AAPL) and Amazon (AMZN) are among the companies due to report their quarterly results this week.

Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.

Airline stocks showed a significant move to the downside, however, with the NYSE Arca Airline Index tumbling by 2.4 percent.

A steep drop by the price of crude oil also weighed on energy stocks, dragging the Philadelphia Oil Service Index and the NYSE Arca Oil Index down by 1.6 percent and 1.0 percent, respectively.

Financial and computer hardware stocks also saw some weakness, while networking stocks saw notable strength, driving the NYSE Arca Networking Index up by 1.0 percent.

Commodity, Currency Markets

Crude oil futures are falling $0.39 to $75.42 a barrel after slumping $1.35 to $75.81 a barrel on Monday. Meanwhile, after edging down $3.20 to $2,377.80 an ounce in the previous session, gold futures are inching up $6.50 to $2,384.30 an ounce.

On the currency front, the U.S. dollar is trading at 154.96 yen compared to the 154.02 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0803 compared to yesterday’s $1.0821.

Asia

Asian stocks fell broadly on Tuesday as investors awaited cues from a slew of central bank meetings around the world and mega-cap U.S. tech earnings.

The Federal Reserve, the Bank of England and the Bank of Japan are holding monetary policy meetings this week, while Microsoft is set to report its financial results on Tuesday, Meta Platforms on Wednesday and Apple and Amazon on Thursday.

The Fed announces its monetary policy decision on Wednesday, with analysts expecting no change in interest rates. However, the accompanying statement may offer hints on whether there will be a rate cut in September.

The dollar held in a tight range in Asian trade and Treasury yields held relatively steady, while gold edged higher on rate cut expectations. Oil extended recent losses on Chinese demand concerns.

China’s Shanghai Composite Index dropped 0.4 percent to 2,879.30 and Hong Kong’s Hang Seng Index tumbled 1.4 percent to 17,002.91 ahead of Chinese factory activity data due this week.

Japanese markets eked out modest gains as data showed the nation’s unemployment rate dipped to 2.5 percent in June from 2.6 percent in the previous month, marking the first improvement in five months.

The Nikkei 225 Index edged up 0.2 percent to 38,525.95, while the broader Topix Index settled 0.2 percent lower at 2,754.45.

Seoul stocks fell sharply, with the Kospi slumped 1.0 percent to 2,738.19 ahead of Samsung earnings.

Australian stocks closed lower ahead of domestic CPI data due on Wednesday. The benchmark S&P ASX 200 Index fell 0.5 percent to 7,953.20, with miners leading losses. The broader All Ordinaries Index shed 0.6 percent to finish at 8,176.60.

Fortescue Metals Group plunged 10.2 percent after Capital Group Cos. sold a A$1.9 billion ($1.2 billion) stake in the iron ore miner.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.6 percent to 12,391.05.

Europe

European stocks are turning in a mixed performance on Tuesday as investors await cues from major corporate earnings reports, key economic data and a slew of central bank meetings.

Commodities traded mostly lower as copper and iron ore prices fell on Chinese demand concerns.

In economic news, France’s economy posted faster-than-expected growth in the second quarter on investment and exports, the first estimate from the statistical office INSEE showed.

GDP expanded 0.3 percent sequentially, beating expectations for an increase of 0.2 percent. The rate matched the 0.3 percent growth logged in the first quarter, which was revised up from 0.2 percent.

While the U.K.’s FTSE 100 Index is down by 0.2 percent, the French CAC 40 Index and the German DAX Index are both up by 0.4 percent.

Glencore has shown a notable move to the downside after it reported production decreases in its main commodities for the first half of the year.

Fresenius Medical Care has also slumped after the dialysis specialist cut the outlook for volumes in its key U.S. market.

Clariant has also plunged as the Swiss chemical company reported a decline in second quarter earnings on lower prices and trimmed its sales outlook.

Ocado Group has also plummeted. The online supermarket and technology group is extending the maturity of its debt to fund its growth plans.

Spirits maker Diageo has also moved sharply lower after missing its full-year profit forecasts.

Meanwhile, Reinsurance company SCOR SE has gained despite reporting a second qarter group level operating loss of EUR227mn ($246mn).

Chemicals maker Covestro AG has also moved higher despite lowering the upper end of its full-year core profit guidance.

Sika has also rallied. The chemicals maker backed its annual forecast after reporting a 9.2 percent jump in sales for the first half.

BP has also surged. The energy giant maintained the pace of its share buybacks and increased its dividend after reporting a forecast-beating second quarter profit.

Standard Chartered has also soared. The Asia-focused bank announced a $1.5 billion share buyback after delivering a stronger-than-expected second quarter profit.

U.S. Economic News

Standard & Poor’s is scheduled to release its report on home prices in major metropolitan areas in the month of May at 9 am ET.

At 10 am ET, the Conference Board is due to release its report on consumer confidence in the month of July. The consumer confidence index is expected to fall to 99.5 in July after slipping to 100.4 in June.

The Labor Department is also scheduled to release its report on job openings in the month of June at 10 am ET. Job openings are expected to dip to 8.03 million in June from 8.14 million in May.

Stocks In Focus

Shares of F5, Inc. (FFIV) are soaring in pre-market trading after the software company reported fiscal third quarter results that exceeded analyst estimates on both the top and bottom lines.

JetBlue (JBLU) is also likely to see initial strength after the airline reported an unexpected second quarter profit on better than expected revenues.

On the other hand, shares of Lattice Semiconductor (LSCC) are seeing substantial pre-market weakness after the chipmaker reported weaker than expected second quarter results and provided disappointing third quarter revenue guidance.

CrowdStrike (CRWD) may also come under pressure after a report from CNBC said Delta Air Lines (DAL) has hired prominent attorney David Boies to seek damages from the cybersecurity company following an IT outage this month that led to thousands of flight cancellations.