Wall Street’s mood is still somber despite the steep declines seen in the past couple of sessions. The major U.S. index futures are pointing to a modestly higher open on Wall Street on Tuesday.
The technology sector led Monday’s sell-off that was triggered by uncertainty around the interest rate outlook. The Nasdaq Composite index slumped 2.55% to 12,381.57, its lowest level since early August.
The broader S&P 500 moved down 2.14% to 4,137.99, marking the biggest single-day drop since June 16. The Dow Industrials lost close to 2% before settling at 33,063.61.
The 10-year U.S. Treasury note yield topped 3%, which sent the message that the rate hike cycle isn’t over yet, Ross Gerber, co-founder and CEO of Gerber Kawasaki Wealth and Investment Management said.
Fund manager Louis Navellier said another rate hike is likely in September. This could strengthen the dollar further, attracting foreign capital and pushing Treasury yields lower, he added.
At the time of going to press on Tuesday, the S&P 500, Nasdaq and Dow futures were edging up 0.15%, 0.14%, and 0.12%, respectively. The Russel 2000 Index, comprising small-cap stocks, was retreating 0.17%.
“If I had to pick a date for the market to explode to the upside, it would be September 21st, because I think there will be a dovish FOMC statement and that the Fed will essentially say they are now neutral and they will remain data-dependent, which means they probably won't raise rates after September 21st,” Navellier said.
Minneapolis Federal Reserve President Neel Kashkari will make a public appearance after the market closes. The Fed president, who was dovish for the most part of the pandemic, has been adopting a hawkish tone of late.
Investors may also focus on the results of the U.S. manufacturing and services sector surveys, both due at 9:45 a.m. ET, and the results of the Philadelphia Fed’s regional manufacturing survey, due at 10 a.m. ET.
Also at 10 a.m. ET, the Commerce Department will release its U.S. new homes sales data for July. After a pullback of over 8% in June, new home sales are expected to stabilize and remain flat at the previous month’s level.
Another data point regarding the housing market could come from homebuilder Toll Brothers, Inc. (NYSE:TOL), which would release its third-quarter results.
Other noteworthy earnings include those from Chinese e-commerce company JD.com, Inc. (NASDAQ:JD), medical devices company Medtronic plc. (NYSE:MDT) and department store chain Macy’s Inc. (NYSE:M).
Crude oil futures are surging and have currently topped the $92-a-barrel level after Saudi Arabis signaled output cuts by OPEC nations.
Most Asian markets followed Wall Street’s lead overnight and ended lower, although the Indian and Indonesian markets bucked the downtrend.
European stocks are seen flatlining after Monday’s steep declines.
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was up 0.21% to $414.23 and the Invesco QQQ Trust (NASDAQ:QQQ) was trading 0.25% higher at $ 315.16, according to Benzinga Pro data.
