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U.S. Stocks May Give Back Ground Following Recent Strength

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Following the rally seen in the previous session, stocks may give back some ground in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 258 points.

Profit taking may contribute to initial weakness on Wall Street, as some traders look to cash in on the strong upward move seen over the past several sessions.

The Nasdaq and the S&P 500 closed higher for the fifth consecutive session on Monday, with the Nasdaq reaching another new record closing high.

The tech-heavy Nasdaq is up by more than 57 percent from its March low, as technology companies were seen as holding up relatively well in the face of the coronavirus-induced economic downturn.

Tech giants like Apple (AAPL), Amazon (AMZN) and Netflix (NFLX) have led the way higher and all reached new record highs in the previous session.

A lack of major U.S. economic may also lead investors to focus more on the latest news on the coronavirus front, although the markets have largely shrugged off the recent spike in new cases.

Despite the downward momentum for the broader markets, shares of Novavax (NVAX) are soaring in pre-market trading after the biotechnology company announced it has been awarded $1.6 billion in funding by the federal government's Covid-19 vaccine development program.

Solar energy company Vivint Solar (VSLR) is also seeing substantial pre-market strength after agreeing to be acquired by rival Sunrun (RUN) for approximately $1.5 billion in stock.

Shares of Endo International (ENDP) are also likely to move to the upside after the FDA approved the pharmaceutical company's Qwo for the treatment of moderate to severe cellulite in the buttocks of adult women.

After showing a strong move to the upside early in the session, stocks remained firmly positive throughout the trading day on Monday. The major averages extended last week's upward trend, with the tech-heavy Nasdaq reaching another new record closing high.

While the major averages all posted strong gains, the Nasdaq outperformed its counterparts. The Nasdaq soared 226.02 points or 2.2 percent to 10,433.65, the Dow surged up 459.67 points or 1.8 percent to 26,287.03 and the S&P 500 jumped 49.71 points or 1.6 percent to 3,179.72.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index rose by 0.4 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has tumbled by 1.6 percent, the German DAX Index is down by 1.4 percent and the French CAC 40 Index is down by 1.2 percent.

In commodities trading, crude oil futures are slipping $0.28 to $40.35 a barrel after edging down $0.02 to $40.63 a barrel on Monday. Meanwhile, after rising $3.50 to $1,793.50 an ounce in the previous session, gold futures are falling $8.80 to $1,784.70 an ounce.

On the currency front, the U.S. dollar is trading at 107.64 yen compared to the 107.35 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1293 compared to yesterday's $1.1309.

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