With traders expressing renewed concerns about the financial situation in Europe, stocks are likely to move sharply lower in early trading on Tuesday. The major index futures are pointing to a sharply lower open for the markets, with the Dow futures down by 219 points.
The sharp drop by the futures comes on the heels of news that Greek Prime Minister George Papandreou has decided to put the Greek bailout package up for a referendum, potentially derailing the agreement reached by European leaders last week.
Peter Boockvar, equity strategist at Miller Tabak, said, "The decision by Greek PM Papandreou to hold a referendum on the European plan to save Greece is basically a call to the Greeks of whether they want in or out of the euro more than a vote on the latest bailout plan."
"The Greeks don't want more austerity but they want to stay in the euro and that's why the referendum will likely get a yes vote but we unfortunately have to wait until January for this," he added. "A no vote will lead to a collapse of the bailout, a hard default and a complete mess for everyone else."
Profit taking may also contribute to further weakness on Wall Street, with traders expressing some risk aversion ahead of the Federal Reserve's upcoming monetary policy meeting and Friday's monthly employment report.
Not long after the open, trading may be impacted by the release of the Institute for Supply Management's report on national manufacturing activity, with the report reconciling the mixed regional data.
Economists currently expect the ISM's manufacturing index to edge up to a reading of 52.0 in October from 51.6 in September, indicating a modest acceleration in the pace of growth.
In corporate news, shares of Pfizer (PFE) may be in focus after the drug giant reported much stronger than expected third quarter adjusted earnings growth. The company also raised its full year earnings and revenue guidance.
BankAtlantic Bancorp (BBX) may also attract attention after the company announced an agreement to sell its BankAtlantic subsidiary to BB&T Corp. (BBT). BB&T will acquire about $2.1 billion in loans and $3.3 billion in deposits for an estimated premium of $301 million.
With traders cashing in on the strong upward move seen over the past month, stocks moved sharply lower during trading on Monday. Lingering concerns about the financial situation in Europe and the outlook for the global economy contributed to the pullback by the markets.
The major averages saw further downside going into the close, ending the day just off their lows for the session. The Dow tumbled 276.10 points or 2.3 percent to 11,955.01, the Nasdaq plunged 52.74 points or 1.9 percent to 2,684.41 and the S&P 500 plummeted 31.79 points or 2.5 percent to 1,253.30.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index fell by 1.7 percent, while Hong Kong's Hang Seng Index dropped by 2.5 percent.
The major European markets are also showing substantial moves to the downside, pulling back further off their recent highs. While the U.K.'s FTSE 100 Index is down by 3.4 percent, the French CAC 40 Index and the German DAX Index are both plummeting by 5.7 percent.
In commodities trading, crude oil futures are falling $2.86 to $90.33 a barrel after edging down $0.13 to $93.19 a barrel on Monday. Gold futures are sliding $32 to $1,693.20 an ounce. In the previous session, the precious metal declined $22 to $1,725.20 an ounce.
Among currencies, the U.S. dollar is trading at 78.2825 yen compared to the 78.17 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3618 compared to yesterday's $1.3858.
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Market Analysis
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.