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U.S. Stocks May Give Back Ground In Early Trading

wallstreet july23 02mar21 lt

After ending previous session sharply higher, stocks may give back some ground in early trading on Tuesday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 51 points.

Profit taking may contribute to initial weakness on Wall Street, as traders cash in on yesterday's strong gains. The S&P 500 posted its biggest single-day gain since last June on Monday.

Traders are also likely to keep an eye on activity in the bond market, which has been a key driver of trading in recent sessions.

The yield on the benchmark ten-year note is little changed in early trading after moving lower over the two previous sessions.

The ten-year yield spiked above 1.6 percent last Thursday, raising concerns about the outlook for interest rates despite the Federal Reserve's assurances monetary policy will remain unchanged for the foreseeable future.

Any early selling pressure is likely to be relatively subdued, as continued optimism about coronavirus vaccines and additional fiscal stimulus helps prop up the markets.

A lack of major U.S. economic data may also keep traders from making significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

Stocks rose sharply on Monday, buoyed by data showing a notable surge in manufacturing activity in the country and on rising hopes about additional stimulus after the House passed a $1.9 trillion coronavirus relief bill on Saturday.

All the major averages ended the session with handsome gains. The Dow surged up 603.14 points or 2 percent to 31,535.51, the S&P 500 jumped 90.67 points or 2.4 percent to 3,901.82, and the Nasdaq soared 396.48 points or 3 percent at 13,588.83.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slid by 0.9 percent, while China's Shanghai Composite Index slumped by 1.2 percent.

Meanwhile, the major European markets have moved to the upside over the course of the session. While the German DAX Index has risen by 0.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.5 percent.

In commodities trading, crude oil futures are rising $0.17 to $60.81 a barrel after sliding $0.86 to $60.64 a barrel on Monday. Meanwhile, after falling $5.80 to $1,723 an ounce in the previous session, gold futures are climbing $3.40 to $1,726.30 an ounce.

On the currency front, the U.S. dollar is trading at 106.91 yen compared to the 106.76 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2023 compared to yesterday's $1.2049.

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