U.S. stock-index futures inched higher on Tuesday, implying a slight gain following the previous session’s move lower, as investors once again looked past trade tensions to focus instead on strong economic fundamentals.
Where are the major benchmarks trading?
Futures for the Dow Jones Industrial Average YMU9, +0.00% rose 40 points, or 0.2%, to 26,651. S&P-500 futures ESU9, -0.54% were up 4.6 points to 2,930, a gain of 0.2%. Nasdaq-100 futures NQU9, +0.17% rose 12 points to 7,598, up 0.2%.
Stocks mostly fell on Monday, though the Nasdaq COMP, +0.08% eked out a slight move higher. The Dow DJIA, -0.68% fell 0.7% — retreating from a record hit last week — while the S&P 500 SPX, -0.35% lost 0.4%, putting it 0.7% below its own record.
What’s driving markets?
Monday’s move came as issues surrounding trade returned to the forefront of investor sentiment. While Wall Street has repeatedly ignored the threat of rising trade tensions, focusing instead on strong economic data and corporate fundamentals, the issue has resulted in short-term volatility, as investors remain concerned that the situation could escalate into a full-blown trade war, which could have a more severe impact on global demand and growth.
On Monday, Chinese officials fired back against the administration of President Donald Trump, accusing it of “trade bullyism” and pushing an “America First” agenda at the cost of international relations. The comments came as the latest exchange of tariffs took effect—10% tariffs on $200 billion worth of Chinese goods, which was met with $60 billion in tariffs on U.S. goods by China.
Investors are also looking ahead to upcoming commentary by the Federal Reserve, which is widely expected to announce an interest-rate increase at the conclusion of its meeting on Wednesday. The meeting will be followed by Fed Chairman Jerome Powell’s news conference during which investors are expected to seek insight into the state of the economy, the impact of trade issues, and the path of future rate moves.
In the latest economic data, a reading on July home prices will be released at 9 a.m. ET, with a gauge of September consumer confidence coming out an hour later.
What are market analysts saying?
“We stick to our guns that further [trade] escalation may continue to have diminishing market effects, especially if the measures are already flagged well ahead before the official announcement,” said Charalambos Pissouros, senior market analyst at JFD Brokers.
“Investors have been digesting the idea of a full-blown trade war for months now, and on top of that, they are already aware of what could be the next steps. Yesterday’s market reaction corroborates our view,” he added, noting that the move lower was relatively modest.
What stocks are in focus?
The co-founders of Instagram announced they have resigned from Facebook Inc. FB, -2.21% and that they plan to leave the company in the coming weeks. Shares of the social-media giant dipped in quiet premarket trading.
Comcast Corp. CMCSA, -5.99% said it had bought more than 30% of shares in Sky PLC SKYAY, +8.70% after winning a bidding war for the European pay-TV company with a $38.8 billion offer over the weekend.
Ascena Retail Group Inc. ASNA, +14.71% late Monday reported earnings and sales that beat expectations. The stock jumped more than 20% in light premarket trading.
Novartis AG NVS, -0.20% plans to cut more than 2,000 jobs as part of a global restructuring, the latest move by its new chief executive to refocus the pharmaceutical giant toward higher-value drugs.
What are other markets doing?
Trading in Asia was mixed, with Japanese equities rising but stocks in China falling on trade uncertainty. European stock indexes were broadly higher.
Crude-oil prices CLK9, +0.67% rose 0.6%, extending a recent rally that has seen prices up 5.5% over the past month. Gold GCM9, +0.16% was unchanged on the day, as was the U.S. dollar index DXY, -0.20%
