U.S. Stocks May Move To The Downside In Early Trading

Following the strong upward move seen last week, stocks may move to the downside in early trading on Tuesday. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.

Concerns about the outlook for the global economy may weigh on Wall Street following the release of disappointing Chinese and European data.

Chinese services activity expanded at the slowest pace in eight months in August, a private-sector survey showed earlier today.

Business activity in the euro zone weakened further in August as the economic downturn extended from manufacturing to the services sector.

HCOB’s final Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 46.7 in August from July’s 48.6, marking the lowest level since November 2020.

The Institute for Supply Management is scheduled to release its report on U.S. service sector activity in the month of August on Wednesday.

The ISM’s services PMI is expected to edge down to 52.4 in August from 52.7 in July, although a reading above 50 would still indicate growth in the sector.

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 July. Factory orders are expected to tumble by 2.6 percent in July after surging by 2.3 percent in June.

Stocks moved mostly higher in early trading on Friday but quickly gave back ground and showed a lack of direction over the remainder of the session. The major averages pulled back off their early highs and spent much of the day lingering near the unchanged line.

The Dow managed to spend most of the day in positive territory before closing up 115.80 points or 0.3 percent at 34,837.71. The S&P 500 also rose 8.11 points or 0.2 percent to 4,515.77, while the Nasdaq edged down 3.15 points or less than a tenth of a percent to 14,031.81, snapping a five-day winning streak.

Nonetheless, the major averages all posted strong gains for the week. While the Nasdaq spiked 3.3 percent, the S&P 500 surged 2.5 percent and the Dow jumped by 1.4 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday. Hong Kong’s Hang Seng Index plunged by 2.1 percent and China’s Shanghai Composite Index slid by 0.7 percent, although Japan’s Nikkei 225 Index bucked the downtrend and rose by 0.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the German DAX Index and the French CAC 40 Index are both down by 0.1 percent.

In commodities trading, crude oil futures are slipping $0.29 to $85.26 a barrel after surging $1.92 to $85.55 a barrel last Friday. Meanwhile, after inching up $1.20 to $1,967.10 an ounce in the previous session, gold futures are falling $12.30 to $1,954.80 an ounce.

On the currency front, the U.S. dollar is trading at 147.47 yen compared to the 146.47 yen it fetched on Monday. Against the euro, the dollar is valued at $1.0721 compared to yesterday’s $1.0796.