U.S. Stocks May Add To Last Week’s Strong Gains In Early Trading

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to move to the upside as trading resumes following the Presidents’ Day holiday on Monday.

The markets may continue to benefit from the upward momentum seen last week, which lifted the Nasdaq and the S&P 500 back within striking distance of their record highs.

The S&P 500 ended last Thursday’s trading just shy of the record closing high set in January before edging slightly lower on Friday.

Last week’s gains came after President Donald Trump signed a memorandum calling on members of his administration to review plans for reciprocal tariffs on U.S. trade partners but stopped short of imposing the tariffs.

Following the rally seen during Thursday’s session, stocks turned in a relatively lackluster performance during trading on Friday. The major averages bounced back and forth across the unchanged line before eventually ending the day mixed.

While the tech-heavy Nasdaq climbed 81.13 points or 0.4 percent to 20,026.77, the S&P 500 edged down 0.44 points or less than a tenth of a percent to 6,114.64 and the narrower Dow fell 165.35 points or 0.4 percent to 44,546.08.

Despite the mixed performance on the day, stocks posted strong gains for the week. The Nasdaq surged by 2.6 percent, the S&P 500 jumped by 1.5 percent and the Dow advanced by 0.6 percent.

The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets following Thursday’s rally, which saw the S&P 500 jump near its record highs despite data showing a bigger than expected increase by producer prices.

Traders were also digesting a mixed batch of U.S. economic data, including a Commerce Department report showing retail sales slumped by much more than expected in January.

The report said retail sales slid by 0.9 percent in January after climbing by an upwardly revised 0.7 percent in December.

Economists had expected retail sales to edge down by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

However, economists noted the sharp decline was largely due to extreme wintery conditions and the California wildfires.

A separate report from the Federal Reserve showed industrial production rose by more than expected in January, although the increase was largely due to a weather-related surge by utilities output.

The Fed said industrial production climbed by 0.5 percent in January after jumping by an upwardly revised 1.0 percent in December.

Economists had expected industrial production to rise by 0.3 percent compared to the 0.9 percent advance originally reported for the previous month.

“Retail sales will likely recover in coming months as Californians pick up the pieces and as winter weather affects the Midwest and East Coast less,” said Bill Adams, Chief Economist for Comerica Bank.

“Similarly, the industrial production report was choppy in January with obvious weather effects boosting utilities demand and weighing on mining and manufacturing,” he added. “These short-term fluctuations will fade quickly.”

While most of the major sectors showed only modest moves on the day, computer hardware stocks extended Thursday’s rally, driving the NYSE Arca Computer Hardware Index up by 2.9 percent to a record closing high.

Significant strength was also visible among airline stocks, as reflected by the 2.3 percent surge by the NYSE Arca Airline Index.

On the other hand, gold stocks moved sharply lower along with the price of the precious metal, resulting in a 4.2 percent nosedive by the NYSE Arca Gold Bugs Index.

Pharmaceutical stocks also showed a notable move to the downside, dragging the NYSE Arca Pharmaceutical Index down by 1.7 percent.

Commodity, Currency Markets

Crude oil futures are climbing $0.45 to $71.19 a barrel after falling $0.55 to $70.74 a barrel last Friday. Meanwhile, after plunging $44.70 to $2,900.70 an ounce in the previous session, gold futures are jumping $31.70 to $2,932.40 an ounce.

On the currency front, the U.S. dollar is trading at 151.68 yen compared to the 151.51 yen it fetched on Monday. Against the euro, the dollar is valued at $1.0445 compared to yesterday’s $1.0484.

Asia

Asian stocks ended mixed on Tuesday amid U.S. tariff concerns and ahead of Ukraine peace talks in Saudi Arabia.

The U.S. dollar edged up from a two-month low and gold traded firm above $2,900 per ounce after a top Federal Reserve official downplayed the prospect of Donald Trump’s trade war stoking inflation.

Oil prices moved up, with WTI futures rising more than 1 percent as OPEC delegates said the group was considering delaying restoring output.

China’s Shanghai Composite Index ended down 0.9 percent at 3,324.49, giving up early gains on optimism that Beijing is shifting its stance to give the private sector a freer hand following a years-long crackdown. Hong Kong’s Hang Seng Index rallied 1.6 percent to 22,976.81 on AI-related optimism.

Japanese markets eked out modest gains, with defense and banking stocks leading the charge. Mitsubishi Heavy Industries rallied 2.7 percent and Kawasaki Heavy Industries jumped 4.7 percent on expectations of increased military spending. Tech stocks such as Advantest and Tokyo Electron gained 3.2 percent and 1.4 percent, respectively.

The Nikkei 225 Index rose 0.3 percent to 39,270.40 on the back of promising GDP data and speculation around a Nissan-Honda merger. The broader Topix Index settled 0.3 percent higher at 2,775.51.

Seoul stocks rose notably to extend gains for a sixth consecutive session, with technology stocks leading the surge. The Kospi climbed 0.6 percent to 2,626.81. Market bellwether Samsung Electronics advanced 1.6 percent.

Australian markets slipped for a second straight session as the Reserve Bank struck a note of caution after delivering its first rate cut in four years.

The benchmark S&P/ASX 200 Index dropped 0.7 percent to 8,481, dragged down by banks and energy stocks. The broader All Ordinaries Index ended down 0.6 percent at 8,756.70.

Banks Commonwealth, NAB, ANZ and Westpac fell 1-3 percent. Beach Energy fell over 1 percent and Woodside Energy Group lost 1.5 percent.

New Zealand’s benchmark S&P/NZX-50 Index edged down 0.1 percent to 13,051.12 and the kiwi dollar fell ahead of the Reserve Bank of New Zealand meeting on Wednesday, when the central bank is expected to cut rates by 50 basis points and signal further reductions this year to rekindle growth.

Europe

European stocks are seeing modest strength on Tuesday after opening on a firm note amid Ukraine war developments.

The U.K. unemployment rate remained unchanged at 4.4 percent in the fourth quarter, while French consumer price inflation climbed to a five-month high of 1.7 percent in January from 1.3 percent in December amid higher costs for energy and services, separate reports showed today.

While the French CAC 40 Index is up by 0.3 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both up by 0.2 percent.

Defense stocks are extending gains from the previous session on expectations of increased military spending in the region.

Automaker Renault has edged up slightly after signing a framework agreement with Geely Holding Group for a new strategic cooperation in Brazil.

Vaccine producer Valneva SE has moved sharply higher after reporting in-line 2024 revenue and cash figures.

Antofagasta has also rallied. The company backed its full-year outlook after reporting a strong 2024 performance with 5 percent revenue growth and a widened EBITDA margin at 52 percent.

CTS Eventim has also surged. The company said its 2024 revenue grew by 19 percent, driven by both its ticketing and live entertainment segments.

Meanwhile, Capgemini has plunged as the IT consulting group reported a 2 percent drop in its annual constant currency sales.

IHG has also slumped. The global hospitality leader announced the acquisition of the Ruby brand from Ruby SARL for an initial purchase consideration of €110.5 million (approximately $116 million).

U.S. Economic News

A report released by the Federal Reserve Bank of New York on Tuesday showed a turnaround by regional manufacturing activity in the month of February.

The New York Fed said its general business conditions index jumped to a positive 5.7 in February from a negative 12.6 in January, with a positive reading indicating growth. Economists had expected the index to climb to a negative 1.0.

Meanwhile, the report said optimism about the outlook for conditions over the next six months dropped significantly, with the index for future business activity slumping to 22.2 in February from 36.7 in January.

At 10 am ET, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of February. The housing market index is expected to come in unchanged after inching up to 47 in January.

San Francisco Federal Reserve President Mary Daly is due to speak and participate in a moderated discussion before the 2025 Conference for Community Bankers hosted by the American Bankers Association at 10:20 am ET.

At 1 pm ET, Federal Reserve Vice Chair for Supervision Michael Barr is scheduled to speak on “Artificial Intelligence in the Economy and Financial Stability” before the Council on Foreign Relations.