The spotlight will also likely be on the week’s key data points that will have readthroughs for next month’s Federal Open Market Committee meeting and the three-day Jackson Hole Symposium.
The soft patch seen in equity markets will likely continue as major U.S. index futures traded modestly lower early Tuesday. The market participants are widely expected to bide their time ahead of several key catalysts lined up over the next three days.
Following the summit between President Donald Trump and the European leaders, the U.S. President hinted at a potential bilateral talk between Ukrainian President Volodymyr Zelenskyy and his Russian counterpart, Vladimir Putin. Notwithstanding the development, there is continuing uncertainty over the resolution to the war that has raged for more than three years now.
Late Monday, ratings agency S&P reaffirmed its ‘AA+’ long-term and ‘A-1+’ short-term unsolicited sovereign credit ratings on the U.S., while maintaining the outlook in the long-term rating at ‘stable.’ “Broad revenue buoyancy, including robust tariff income, will offset any fiscal slippage from tax cuts and spending increases,” the agency said.
As of 2:45 a.m. ET on Tuesday, the S&P 500 and Nasdaq 100 futures fell nearly 0.20% and the Dow futures moved down a more modest 0.11%. The Russell 200 futures lost a steeper 0.27%.
On Monday, stocks traded listlessly in the absence of major catalysts before ending mixed. Real estate, energy, utility, communication services, material, and healthcare stocks saw some degree of weakness, while consumer, financial, industrial,s and IT stocks saw modest strength.
The Invesco QQQ Trust (QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, ended down 0.05%, and the SPDR S&P 500 ETF (SPY) edged down 0.02%. The SPDR Dow Jones Industrial Average ETF Trust (DIA) slipped 0.11%, while the iShares Russell 2000 ETF (IWM) gained 0.37%.
On the economic front, the Commerce Department is scheduled to release the housing starts and building permits report for July at 8:30 a.m. ET. Fed Vice Chair for Supervision Michelle Bowman is due to make two public appearances (at 10 a.m. ET and at 2:10 p.m. ET).
Home Depot (HD), Medtronic (MDT), Jack Henry (JKHY), La-Z-Boy (LZB), and Toll Brothers (TOL) are among the notable names reporting on Tuesday.
WisdomTree Senior Economist Jeremy Siegel said Federal Reserve Chair Jerome Powell’s address at this week’s Jackson Hole Symposium will be the “fulcrum on which the next leg of this market pivots.”
“If Powell acknowledges the cooling in labor markets and the benign trend in core PCE, it opens the door for a 25-basis-point cut,” the economist said.
“If he stresses the need for more data and downplays recent softness, markets will take it as a hawkish signal, and I expect risk markets to react negatively.”
Crude oil futures retreated moderately early Tuesday after rebounding in Monday’s session, while gold futures were little changed around the $3,380 level. The 10-year Treasury note yield edged down marginally to 4.339%.
The U.S. dollar was slightly firmer against most major counterparts, except the safe-haven bets, such as the yen and Swiss franc.
Most major markets retreated, tracking the lackluster performance by Wall Street stocks overnight.
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