All sectors, except energy, ended in the green on Monday, with communication services and IT stocks leading the gains.
U.S. stock futures held up very early on Tuesday, implying that the market may extend the strong gains seen in Monday’s session.
Palantir Technologies’ (PLTR) first one-billion-dollar quarter sparked a rally in the high-flying stock, and the optimism is likely to rub off on other tech stocks with exposure to artificial intelligence (AI).
San Francisco Federal Reserve President told Reuters on Monday that more than two rate cuts may be warranted if labor market conditions worsen further, raising hopes of an easing at the September rate-setting meeting.
As of 12:05 a.m. ET on Tuesday, the Nasdaq and Russell 2000 futures rose 0.23% and 0.34%, respectively, while the Dow and S&P 500 futures were up over 0.15%.
Stocks rallied on Monday and hovered in positive territory through the session, as traders hunted for bargains following the S&P 500’s four-day losing streak. The major averages declined sharply on Friday amid concerns about tariffs and a soft monthly payrolls report.
All sectors, except energy, ended in the green on Monday, with communication services and IT stocks leading the gains.
The rally inspired a post from President Donald Trump on his Truth Social account. “Good day in the Stock Market (Dow + 585.06, 1.34%, S&P 500 + 91.93, 1.47%, NASDAQ + 403.45, 1.95%), but there will be many more days like this,” he said, adding that “America is very rich again, and stronger than ever before.”
The Invesco QQQ Trust (QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, climbed 1.85%, and the SPDR S&P 500 ETF (SPY) jumped 1.47%. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the iShares Russell 2000 ETF (IWM) rallied 1.40% and 2.10%, respectively.
On the economic front, the Commerce Department will release the trade balance report for June, with economists, on average, expecting a surplus of $61 billion compared to a deficit of $75.5 billion in the previous month.
Traders may also focus on S&P’s final July service sector purchasing managers’ index (PMI) and the Institute of Supply Management’s manufacturing services PMI for July.
Earnings on investors’ radar for Tuesday include: BP (BP), Caterpillar (CAT), DuPont (DD), Expeditors International (EXPD), Molson Coors Brewing (TAP), Pfizer (PFE), Yum! Brands (YUM), Yum China (YUMC), Advanced Micro Devices (AMD), Devon Energy (DVN), Lucid Group (LCID), News Corp. (NWSA), Rivian Automotive (RIVN), Skyworks (SWKS), Viasat (VSAT), and Super Micro Computer (SMCI).
WisdomTree Senior Economist Jeremy Siegel said the missing piece amid the recent rally is rotation. While small‑cap and deep‑value baskets are priced at historic discounts, institutional flows are still pinned to mega-cap growth, he said.
The economist said the Federal Reserve’s pursuit of an easing path will steepen the curve and reduce the financing costs for Main Street firms.
“That may be the catalyst for the long‑awaited hand‑off from the Magnificent 7 to the Russell 2000.”
Crude oil futures extended their declines in Asian trading, while gold futures remained nearly flat above the $3,420 level. The 10-year Treasury note edged up after dropping below the 4.20% threshold on Monday.
The U.S. dollar gained some ground in the Asian session.
Major Asian markets advanced strongly on Tuesday, encouraged by Wall Street’s gains overnight.
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