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U.S. Stocks May Extend Recent Pullback In Early Trading

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Stocks are likely to move to the downside in early trading on Tuesday, pulling back further off the record highs set last Wednesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 113 points.

Waning optimism about a near-term interest rate cut may continue to weigh on the markets following last Friday's better than expected monthly jobs data.

The Labor Department report showing much stronger than expected job growth in the month of June put a big dent in hopes the Federal Reserve will cut interest rates at its next meeting later this month.

Nonetheless, upcoming Congressional testimony from Fed Chairman Jerome Powell may keep some traders on the sidelines.

Powell is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

The Fed chief is not likely to specifically outline the central bank's plans to lawmakers, but traders are likely to closely analyze his comments for clues about the outlook for rates.

Wednesday will also see the release of the minutes of the Fed's last monetary policy meeting, which may shed additional light on the central bank's decision to make notable changes to its accompanying statement.

Stocks came under pressure early in the trading session on Monday and remained mostly lower throughout the day. With the drop on the day, the major averages pulled back further off the record closing highs set last Wednesday.

The major averages ended the day firmly in negative territory but off their lows of the session. The Dow slid 115.98 points or 0.4 percent to 26,806.14, the Nasdaq slumped 63.41 points or 0.8 percent to 8,098.38 and the S&P 500 fell 14.46 points or 0.5 percent to 2,975.95.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although Japan's Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent. China's Shanghai Composite Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index slid by 0.8 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 1 percent, the French CAC 40 Index is down by 0.4 percent and the U.K.'s FTSE 100 Index is down by 0.1 percent.

In commodities trading, crude oil futures are rising $0.24 to $57.90 barrel after inching up $0.15 to $57.66 a barrel on Monday. Meanwhile, after edging down $0.10 to $1,400 ounce in the previous session, gold futures are falling $5.60 to $1,394.40 an ounce.

On the currency front, the U.S. dollar is trading at 108.82 yen compared to the 108.72 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1205 compared to yesterday's $1.1214.

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