Plus   Neg

Tech Stocks May Lead To Way Lower In Early Trading

wallstreet1 up 032918 23feb21 lt

After ending the previous session mostly lower, stocks may see further downside in early trading on Tuesday. Technology stocks may lead the lower once again, with the Nasdaq futures tumbling by more than 240 points.

Concerns about the outlook for inflation and the potential for higher interest rates may continue to weigh on the markets due to the recent increase in bond yields.

The yield on the benchmark ten-year note is currently hovering near the one-year closing high set in the previous session.

Traders are likely to keep a close eye on testimony by Federal Reserve Chair Jerome Powell, who is due to appear before a virtual Senate Banking Committee hearing.

Powell is likely to reiterate that the Fed plans to maintain easy monetary policy for the foreseeable future as the economy continues to recover from the coronavirus pandemic.

However, traders may pay closer attention to any comments Powell makes regarding the outlook for inflation due to recent signs of price growth.

The Fed has recently signaled that it is not concerned about inflation, suggesting that inflation should exceed its 2 percent target for some time before the central bank considers raising interest rates.

A notable decline by shares of Tesla (TSLA) may weigh on the tech-heavy Nasdaq, with the electric car maker tumbling by 5.4 percent in pre-market trading.

Tesla is extending the steep drop seen in the previous session after Wedbush analyst Daniel Ives told CNBC the company's share price is now directly linked to the price of bitcoin after its $1.5 billion investment in the cryptocurrency.

Dow component Home Depot (HD) is also seeing pre-market weakness after the home improvement retailer reported better than expected fourth quarter results but declined to provide guidance due to uncertainty related to the COVID-19 pandemic.

Shortly after the start of trading, the Conference Board is also scheduled to release its report on consumer confidence in the month of February. The consumer confidence index is expected to inch up to 89.7 in February from 89.3 in January.

Stocks moved mostly lower during trading on Monday, with the tech-heavy Nasdaq showing a particularly steep drop. The S&P 500 also ended the day firmly in negative territory, while the narrower Dow closed slightly higher.

After falling by more than 200 points in early trading, the Dow edged up 27.37 points or 0.1 percent to 31,521.69. Meanwhile, the Nasdaq plunged 341.42 points or 2.5 percent to 13,533.05 and the S&P 500 slid 30.21 points or 0.8 percent to 3,876.50.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index edged down by 0.2 percent, while Australia's S&P/ASX 200 Index advanced by 0.9 percent.

Meanwhile, European stocks moved mostly lower on the day, dragging the pan-European Stoxx 600 down by 0.7 percent. The German DAX Index has slumped by 1 percent and the U.K.'s FTSE 100 Index has edged down by 0.1 percent, but the French CAC 40 Index is just above the unchanged line.

In commodities trading, crude oil futures are rising $0.20 to $61.90 a barrel after spiking $2.44 to $61.70 a barrel on Monday. Meanwhile, after skyrocketing $31 to $1,808.40 an ounce in the previous session, gold futures are edging down $0.10 to $1,808.30 an ounce.

On the currency front, the U.S. dollar is trading at 105.39 yen compared to the 105.08 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2147 compared to yesterday's $1.2157.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT