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Futures Pointing To Initial Pullback On Wall Street
US Market
The major U.S. index futures are currently pointing to a lower open on Tuesday, with stocks likely to give back ground following the strong upward move seen in the previous session.
A pullback by Nvidia (NVDA) may generate some selling pressure, as the chipmaker is slumping by 2.7 percent in pre-market trading.
Nvidia held its first-ever GTC Conference on Monday, when the company unveiled its latest line of AI chips, called Blackwell.
Shares of Super Micro Computer (SMCI) have also plunged by 10.6 percent in pre-market trading after the company announced the launch of a proposed underwritten registered public offering of 2 million shares of its common stock.
Caution ahead of the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday may also weigh on Wall Street.
While the Fed is widely expected to leave interest rates unchanged, the central bank’s accompanying statement and economic projections could have a significant impact on the outlook for rates.
Recent hotter-than-expected inflation readings have reduced optimism about the likelihood of the Fed’s first rate cut coming in June.
After showing a strong move to the upside early in the session, stocks gave back some ground over the course of the trading day on Monday but managed to close mostly higher. With the upward move, the Nasdaq and the S&P 500 regained ground after closing lower for three straight sessions.
While the major averages came under pressure going into the close, they managed to end the day in positive territory. The Nasdaq advanced 130.27 points or 0.8 percent at 16,103.45, the S&P 500 climbed 32.33 points or 0.6 percent to 5,149.42 and the Dow rose 75.66 points or 0.2 percent at 38,790.43.
Technology stocks helped lead the early rally on Wall Street, with the tech-heavy Nasdaq showing a particularly strong move to the upside.
Shares of Alphabet (GOOGL) surged by 4.6 percent after a report from Bloomberg said Apple (AAPL) is in talks to build Google’s Gemini artificial intelligence engine into the iPhone.
Nvidia also jumped early in the session ahead of its GTC Conference but gave back ground before ending the day up by 0.7 percent.
At the same time, shares of Super Micro Computer plunged by 6.4 percent after the information technology company was added to the S&P 500 before the start of trading.
Meanwhile, traders continued to look ahead to the Federal Reserve’s two-day monetary policy meeting.
In U.S. economic news, a report released by the National Association of Home Builders showed an unexpected improvement in U.S. homebuilder confidence in the month of March.
The report said the NAHB/Wells Fargo Housing Market Index rose to 51 in March from 48 in February. Economists had expected the index to come in unchanged.
With the unexpected increase, the housing market index surpassed the breakeven point of 50 for the first time since hitting 56 last July.
U.S. Economic Reports
A report released by the Commerce Department on Tuesday showed a substantial rebound in new residential construction in the U.S. in the month of February.
The Commerce Department said housing starts spiked by 10.7 percent to an annual rate of 1.521 million in February after plunging by 12.3 percent to a revised rate of 1.374 million in January.
Economists had expected housing starts to surge by 7.1 percent to a rate of 1.425 million from the 1.331 million originally reported for the previous month.
The report also said building permits shot up by 1.9 percent to an annual rate of 1.518 million in February after dipping by 0.3 percent to a revised rate of 1.489 million in January.
Building permits, an indicator of future housing demand, were expected to jump by 1.7 percent to a rate of 1.495 million from the 1.470 million originally reported for the previous month.
At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $13 billion worth of twenty-year bonds.
Europe
European stocks are little changed in cautious trading on Tuesday, as investors await the Fed and Bank of England policy meetings this week for directional cues.
While the U.K.’s FTSE 100 Index is down by 0.2 percent, the German DAX Index is just above the unchanged line and the French CAC 40 Index is up by 0.2 percent.
DEUTZ Group has moved notably higher after delivering record earnings and meeting guidance for a third year in a row.
Trustpilot Group, an online platform that connects businesses and consumers, has also jumped after it reported a narrower loss for the full year, reflecting improved revenue.
Unilever has also surged. The consumer goods major announced plans to separate its Ice Cream division and to launch a major productivity program to drive faster growth and higher margin.
Close Brothers has also shown a substantial move to the upside after it announced a £400 million plan to bolster its capital position.
Thyssenkrupp AG is marginally higher. The German industrial conglomerate announced that it is evaluating a planned separation of Thyssenkrupp Marine Systems with global investment firm Carlyle.
Meanwhile, airport operator Fraport has plunged after its fourth-quarter EBITDA missed estimates and 2024 guidance came in below expectations.
Recruitment firm SThree dropped 1.3 percent after saying the jobs market was “challenging” in the first couple of months of 2024.
Diageo, a provider of alcoholic beverages, has also declined after naming Sir John Manzoni, a non-executive director of the company, as Chair of the Board by February 5, 2025, when current Chair Javier Ferrán retires.
Asia
Asian stocks turned in a mixed performance on Tuesday as investors awaited key central bank decisions this week for directional cues.
The yen slid to 150 per dollar as the Bank of Japan ended 8 years of negative interest rates, making a historic shift with the first-rate hike in 17 years.
The Aussie dollar hit a two-week low as the Reserve Bank of Australia left interest rates at a 12-year high and signaled it may be done tightening monetary policy.
A two-day policy meeting of the U.S. Federal Reserve gets underway later today, with investors looking for clear signals on rate cuts in the face of sticky inflation.
Chinese markets fell as regulators accused Evergrande Group of falsifying revenue by over $78 billion. China’s Shanghai Composite Index dropped 0.7 percent to 3,062.76 and Hong Kong’s Hang Seng Index slumped 1.2 percent to 16,529.48.
A decision from the People’s Bank of China on its benchmark loan prime rate is due on Wednesday, with no changes expected.
Japanese markets reversed early losses to end notably higher as the Bank of Japan maintained a dovish stance, vowing to continue purchasing government bonds at a “steady” pace amid persistent concerns over the economic recovery.
The Nikkei 225 Index climbed 0.7 percent to 40,003.60 as the yen weakened to a two-week low amid signs that monetary conditions will remain largely accommodative.
The broader Topix Index settled 1.1 percent higher at 2,750.97. Exporters Sony, Honda Motor, Panasonic and Toyota climbed 1-3 percent. Nvidia supplier Advantest Corp gave up 1.2 percent, while Tokyo Electron gained 1.5 percent.
Seoul stocks fell sharply, dragged down by tech companies. SK Hynix lost 2.5 percent despite Nvidia unveiling its latest line of AI chips, called Blackwell, at a developer conference on Monday. The Kospi ended down 1.1 percent at 2,656.17.
Australian markets eked out modest gains after the Reserve Bank of Australia kept interest rates steady, as widely expected, but warned the war on inflation is not yet won.
The benchmark S&P ASX 200 Index rose 0.4 percent to 7,703.20, while the broader All Ordinaries Index gained 0.4 percent to close at 7,957.80.
Commodities
Crude oil futures are creeping up $0.04 to $82.76 a barrel after jumping $1.68 to $82.72 a barrel on Monday. Meanwhile, after inching up $2.80 to $2,164.30 an ounce in the previous session, gold futures are falling $8.60 to $2,155.70 an ounce.
On the currency front, the U.S. dollar is trading at 150.44 yen compared to the 150.15 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0852 compared to yesterday’s $1.0872.
