Following the significant downturn seen over the course of the previous session, stocks may move back to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.7 percent.
Traders may make another attempt at bargain hunting after the rally seen in early trading on Monday faded as the day progressed.
However, lingering concerns about the economy, inflation and interest rates may continue to hang over the markets ahead of the next week’s Federal Reserve meeting.
A slump by shares of IBM Corp. (IBM) may also limit any early upside, with the tech giant plunging by 5.5 percent in pre-market trading.
The drop by IBM comes after the company reported better than expected second quarter results but lowered its cash flow forecast.
Healthcare giant Johnson & Johnson (JNJ) is also likely to be in focus after reporting second quarter results that beat analyst estimates but cutting its full-year guidance.
On the U.S. economic front, the Commerce Department released a report unexpectedly showing a continued decline in housing starts in the month of June.
The Commerce Department said housing starts slumped by 2.0 percent to an annual rate of 1.559 million after plunging by 11.9 percent to a revised rate of 1.591 million in May.
The continued decrease came as a surprise to economists, who had expected housing starts to jump by 2.3 percent to an annual rate of 1.585 million from the 1.549 million originally reported for the previous month.
With the unexpected decrease, housing starts dropped to the lowest annual rate since hitting 1.505 million in April of 2021.
The report showed building permits also fell by 0.6 percent to an annual rate of 1.685 million in June after tumbling by 7.0 percent to a rate of 1.695 million in May.
Building permits, an indicator of future housing demand, were expected to slump by 2.7 percent to an annual rate of 1.650 million.
Stocks showed a strong move to the upside in early trading on Monday but saw a substantial downturn over the course of the session. The major averages pulled back well off their early highs and into negative territory.
After surging by more than 350 points early in the session, the Dow fell 215.65 points or 0.7 percent to 31,072.61. The Nasdaq also slumped 92.37 points or 0.8 percent to 11,360.05, while the S&P 500 slid 32.31 points or 0.8 percent to 3,830.85.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while Hong Kong’s Hang Seng Index fell by 0.9 percent.
Meanwhile, the major European markets have all moved modestly higher on the day. While the German DAX Index has inched up by 0.1 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 0.3 percent.
In commodities trading, crude oil futures are slumping $1.87 to $100.73 a barrel after soaring $5.01 to $102.60 a barrel on Monday. Meanwhile, after rising $6.60 to $1,710.20 an ounce in the previous session, gold futures are edging down $1.70 to $1,708.50 an ounce.
On the currency front, the U.S. dollar is trading at 137.64 yen compared to the 138.14 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0226 compared to yesterday’s $1.0143.
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