Monday’s strong rally might push traders to the defensive, especially ahead of AI bellwether Nvidia Corp.’s NVDA quarterly results due after the market close. Stock futures point to a modestly lower open on Tuesday. Analysts have begun cautioning of a pause after the month-to-date gains, but the unanimous opinion is that the seasonal rally will lift the market going into the year-end.
Traders will likely keep a close eye on the minutes of the December Fed meeting and the bond yields.
Cues From Tuesday's Trading:
U.S. stocks settled solidly higher on Monday, with technology stocks leading from the front. Traders shed away some of their apprehensions that were evident in the second half of the past week as they begin to factor in a pivot by the Federal Reserve and a soft-landing scenario. Oil’s rally perked up, buying interest in energy stocks.
The averages opened mixed, and after a short bout of volatility in early trading, they advanced steadily through the session to end firmer,
The Nasdaq Composite and the S&P 500 indices were higher for a fifth straight session, with indices ending at their highest levels in over 3-1/2 months. The 30-stock Dow Industrials ended at its highest since August 14.
US Index Performance On Tuesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.13% | 14,284.53 |
| S&P 500 Index | +0.74% | 4,547.38 |
| Dow Industrials | +0.58% | 35,151.04 |
| Russell 2000 | +0.52% | 1,807.08 |
Analyst Color:
The run-up seen in the recent uptrend does not deter an analyst and raises the specter of more upside for the remainder of the year. Carson Group’s Ryan Detrick said with the historic run seen in the past 16 trading days, some pause could happen at any time.
“But be aware that stocks tend to do quite well in December in a pre-election year, so any weakness likely will be another buying opp,” he said.
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.08% |
| S&P 500 | -0.09% |
| Dow | -0.11% |
| R2K | -0.33% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY slipped 0.09% to $453.85, and the Invesco QQQ ETF QQQ fell 0.08% to $390.43, according to Benzinga Pro data.
Upcoming Economic Data:
The National Association of Realtors is due to release the existing home sales report for October at 10 a.m. ET. Economists, on average, expect existing home sales to come in at a seasonally adjusted annual rate of 3.9 million units, almost flat with September’s rate of 3.96 million units.
The Treasury will auction 10-year TIPS bonds at 1 p.m. ET.
The Fed is due to release the minutes of the Federal Open Market Committee’s October 31-November 1 rate-setting meeting. At the meeting, the central bank held interest rates at a 22-year high of 5.25%-5.50%. Traders may be keen to sift through the minutes to get any potential clue towards future fed funds rate trajectory.
See also: Best Futures Trading Software
Stocks In Focus:
- Agilent Technologies, Inc. A shares climbed over 7% in premarket trading following the release of its quarterly results.
- Baidu, Inc. BIDU rose over 2% after the Chinese search giant reported its results.
- Abercrombie & Fitch Co. ANF, Analog Devices, Inc. ADI, Best Buy Co., Inc. BBY, Burlington Stores, Inc. BURL, DICK’S Sporting Goods, Inc. DKS, Hibbett, Inc. HIBB, Kohl’s Corporation KSS, Lowe’s Companies, Inc. LOW and Medtronic plc MDT are among the notable companies due to release their quarterly results ahead of the market open.
- Those reporting after the market close include Nvidia, Autodesk, Inc. ADSK, Guess?, Inc. GES, HP Inc. HPQ, Jack in the Box Inc. JACK, Nordstrom, Inc. JWN and Urban Outfitters, Inc. URBN.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures fell 0.58% to $77.38 in the early European session on Tuesday following Monday's 2.5% jump.
On Tuesday, the benchmark 10-year Treasury note fell 0.016 percentage points to 4.406%.
The Cryptocurrency space has paused after Monday’s gains, and Bitcoin BTC/USD traded firmly above the $37,000 level despite its modest weakness.
The U.S. dollar is weaker in most major currencies ahead of the release of the FOMC minutes.
The major Asian stock market had a mixed session, with the Japanese, Hong Kong, Chinese, New Zealand, and Indonesian markets pulling back. On the other hand, the Taiwanese and South Korean markets advanced notably, and the Australian, Malaysian, and Indian markets posted moderate gains.
European stocks traded mixed by late morning on Tuesday.
Photo by WHYFRAME on Shutterstock
Related Link: Nvidia, Microsoft Reach All-Time Highs, Push Nasdaq 100 Near 2021 Peak – Caution Indicator Flashes
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