After stating the week off on a positive note, stocks could see modest weakness in early trading on Tuesday. Nonetheless, selling pressure is likely to remain somewhat subdued amid a continued decrease by the price of oil.
Lingering concerns about the strength of the financial sector are likely to contribute to some early weakness after financial giant JPMorgan Chase (JPM) said that it has incurred wider losses in its mortgage holdings so far in the third quarter than it did in the second quarter.
In a regulatory filing with the Securities and Exchange Commission on Monday, JP Morgan said that it has lost about $1.5 billion in its mortgage investments in the current quarter compared to the $1.1 billion markdown it took in the second quarter.
Nonetheless, the downward momentum may be partly offset by the release of a report from the Commerce Department showing that the U.S. trade deficit unexpectedly narrowed in the month of June due to a notable increase in the value of exports.
The report showed that the trade deficit narrowed to $56.8 billion in June from a revised $59.2 billion in May. Economists had expected the deficit to widen to $61.9 billion compared to the $59.8 billion originally reported for the previous month.
Oil-sensitive stocks may also extend their recent upward move amid a continued decrease by the price of oil. After ending Monday's trading down $0.75 at $114.45 a barrel, crude for September delivery is currently down $0.20 at $114.25 a barrel.
Additionally, traders may want to keep an eye on alternate energy companies such as VeraSun (VSE), LDK Solar (LDK), and GT Solar (SOLR), which are moving higher in pre-market trading on the heels of some positive earnings news from the sector.
Stocks saw considerable volatility over the course of the trading session on Monday, as traders reacted to movements by the price of oil. The major averages ended the day higher, although well off their highs for the session.
After seeing initial weakness, stocks rebounded as the price of oil moved back to the downside, although the major averages pulled back well off their best levels of the day as the price of oil regained some ground.
After briefly dipping below the unchanged line in the last hour of trading, the Dow rebounded going into the close and the ended the session up 0.4 percent. The Nasdaq posted a notable gain, closing up 1.1 percent, while the S&P 500 ended the day up 0.7 percent.
Among individual stocks, shares of Sonus Networks (SONS) are likely to see notable weakness in early trading after the communications equipment maker reported better than expected second quarter earnings but said it sees weakness in the second half of the year.
On the other hand, shares of Fossil (FOSL) are moving sharply higher in pre-market trading after the watchmaker reported stronger than expected second quarter earnings growth and forecast full year earnings above analyst estimates.
In overseas trading, stock markets across the Asia-Pacific region closed lower on Tuesday despite the positive lead from Wall Street, although the Australian market bucked the downtrend. Japan's benchmark Nikkei 225 index closed down 1 percent at 13,304.
Meanwhile, the major European markets are currently turning in a mixed performance. While the French CAC 40 Index and the German DAX Index are receding 0.2 percent and 0.1 percent, respectively, the U.K.'s FTSE 100 Index is posting a 0.2 percent gain.
On the currency front, the U.S. dollar is giving back some ground after surging higher in recent sessions. Currently, the dollar is worth 109.86 yen and is valued at $1.4936 versus the euro.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.