U.S. Stocks May Regain Ground Following Yesterday’s Tech Sell-Off

Stocks may move to the upside in early trading on Tuesday, regaining ground following the weakness seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.3 percent.

Traders may look to pick up technology stocks at somewhat reduced levels following the sell-off seen in the sector during Monday’s trading.

Shares of Nvidia (NVDA) are surging by 3.3 percent in pre-market trading after the AI darling and market leader plunged by 17.0 percent in yesterday’s session.

Buying interest may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is almost universally expected to leave interest rates unchanged, but traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent economic data has led to concerns about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group’s FedWatch Tool is currently indicating a 74.5 percent chance rates will be lower by at least a quarter point following the Fed’s June meeting.

In U.S. economic news, a report released by the Commerce Department unexpectedly showed a steep drop by new orders for U.S. manufactured durable goods in the month of December amid a nosedive by orders for transportation equipment.

The Commerce Department said durable goods orders plunged by 2.2 percent in December after tumbling by a revised 2.0 percent in November.

Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.2 percent slump that had been reported for the previous month.

However, excluding the steep drop by orders for transportation equipment, durable goods orders rose by 0.3 percent in December after edging down by 0.2 percent in November. Ex-transportation orders were expected to increase by 0.4 percent.

U.S. stocks closed mostly lower on Monday, with those in the technology sector recording more pronounced losses due to sustained selling pressure throughout the day’s trading session.

Among the major averages, the Dow closed up 289.33 points or 0.7 percent at 44,713.58. The S&P 500 ended down 88.96 points or 1.5 percent at 6,012.28, while the Nasdaq plunged 612.47 points or 3.1 percent to 19,341.83.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower, with several major markets closed for holidays. Japan’s Nikkei 225 Index slumped by 1.4 percent, while Australia’s S&P/ASX 200 Index edged down by 0.1 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the German DAX Index is up by 0.8 percent, the U.K.’s FTSE 100 Index is up by 0.6 percent and the French CAC 40 Index is up by 0.5 percent.

In commodities trading, crude oil futures are jumping $0.92 to $74.09 a barrel after tumbling $1.49 to $73.17 a barrel on Monday. Meanwhile, after plunging $40.50 to $2,378.40 an ounce in the previous session, gold futures are climbing $12.90 to $2,751.30 an ounce.

On the currency front, the U.S. dollar is trading at 155.39 yen compared to the 154.51 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0424 compared to yesterday’s $1.0492.

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