Stocks may move to the downside in early trading on Tuesday, extending the pullback seen late in Friday’s session. The major index futures are currently pointing to a moderately lower open for the markets, with the S&P 500 futures down by 0.3 percent.
Traders may continue to cash in on recent strength in the markets, which lifted the Nasdaq and the S&P 500 to their best levels in over a year last week.
Overall trading activity is likely to be somewhat subdued, however, as traders look ahead to congressional testimony by Federal Reserve Chair Jerome Powell.
Powell is due to testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.
Traders are likely to pay close attention to Powell’s remarks, looking for additional clues about the outlook for interest rates.
Comments by a number of other Fed officials are also likely to attract attention in the coming days along with reports on weekly jobless claims and existing home sales.
On the U.S. economic front, a report released by the Commerce Department showed new residential construction in the U.S. unexpectedly skyrocketed in the month of May.
The Commerce Department said housing starts soared by 21.7 percent to an annual rate of 1.631 million in May after tumbling by 2.9 percent to a revised rate of 1.340 million in April.
Economists had expected housing starts to edge down to a rate of 1.400 million from the 1.401 million originally reported for the previous month.
The report said building permits also surged by 5.2 percent to an annual rate of 1.491 million in May after slumping by 1.4 percent to a revised rate of 1.417 million in April.
Building permits, an indicator of future housing demand, were expected to rise to a rate of 1.423 million from the 1.416 million originally reported for the previous month.
Stocks turned in a lackluster performance throughout much of the trading session on Friday before coming under pressure in the latter part of the session. The major averages all moved to the downside, with the tech-heavy Nasdaq leading the way lower.
The major averages finished the session just off their worst levels of the day. The Nasdaq slid 93.25 points or 0.7 percent to 13,689.57, the S&P 500 fell 16.25 points or 0.4 percent to 4,409.59 and the Dow dipped 108.94 points or 0.3 percent to 34,299.12.
Despite the pullback on Wall Street, the major averages posted strong gains for the week. The Nasdaq spiked by 3.3 percent, the S&P 500 surged by 2.6 percent and the Dow jumped by 1.3 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan’s Nikkei 225 Index inched up by 0.1 percent and Australia’s S&P/ASX 200 Index advanced by 0.9 percent, while China’s Shanghai Composite Index fell by 0.5 percent.
The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.1 percent, the French CAC 40 Index is down by 0.1 percent and the German DAX Index is down by 0.2 percent.
In commodities trading, crude oil futures are falling $0.68 to $71.10 a barrel after jumping $1.16 to $71.78 a barrel last Friday. Meanwhile, after inching up $0.50 to $1,971.20 an ounce in the previous session, gold futures are slipping $6 to $1,965.20 an ounce.
On the currency front, the U.S. dollar is trading at 141.56 yen versus the 141.98 yen it fetched on Monday. Against the euro, the dollar is trading at $1.0917 compared to yesterday’s $1.0921.
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