US Stocks Likely To Open Higher After S&P 500's Four-Day Fall: 'Market Is Risk-Off,' Says Expert

U.S. stock futures rose on Tuesday after closing lower for the week on Friday. Futures of major benchmark indices were trading higher in premarket.

The markets were closed on Monday in observance of Memorial Day holiday, affecting trading activity in the exchanges, including the New York Stock Exchange and Nasdaq.

President Donald Trump announced the extension of the 50% tariffs on Sunday till July 9, which he had initially announced on Friday.

Trump said that he spoke to European Commission President Ursula von der Leyen, who said in a post on X that the EU is ready to engage in swift and decisive negotiations.

Meanwhile, the 10-year Treasury bond yielded 4.46% and the two-year bond was at 3.98%. The CME Group's FedWatch tool‘s projections show markets pricing a 97.9% likelihood of the Federal Reserve keeping the current interest rates unchanged in its June meeting.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Tuesday. The SPY was up 1.54% to $588.01, while the QQQ advanced 1.73% to $518.07, according to Benzinga Pro data.

Cues From Last Session:

Sectoral moves weighed on U.S. stocks Friday, with information technology, consumer discretionary, and communication services contributing to the S&P 500’s fourth consecutive daily decline.

However, consumer staples and utilities bucked the trend to close higher.

Individual stock movements reflected broader concerns: Apple Inc. AAPL shares dropped nearly 3% after President Trump demanded domestic iPhone manufacturing, threatening a 25% tariff.

Ross Stores Inc. ROST plunged about 10% on weaker-than-expected second quarter EPS guidance, while Deckers Outdoor Corp. DECK sank 20% following its fourth quarter earnings report.

Meanwhile, U.S. sales of new single-family homes surprisingly climbed 10.9% month-over-month to an annualized rate of 743,000 units.

Insights From Analysts:

Billionaire investor Chamath Palihapitiya signaled a significant shift in market sentiment, highlighting a new trend.

On Monday, he posted on X, declaring the “market is risk-off,” citing a Barchart post that revealed money market fund assets surged to a new all-time high of $7.24 trillion.

This preference for money market funds, or cash equivalents, typically intensifies during periods of heightened market and economic turmoil.

The recent spike underscores growing investor caution amid persistent macroeconomic uncertainty and evolving interest rate expectations, indicating a major swing in investor confidence over the past couple of weeks.

Get Started

Earn 7.2% — No Matter What the Fed Does

Markets expect rate cuts — but your earnings don’t have to suffer. Lock in 7.2% until 2028 from ten individual bonds.

Get Started

Chamath, in his post, implied that the investors were fleeing riskier assets such as stocks in favor of safer, yield-generating instruments.

While some view this as investor anxiety, others, like The Market Ear, see these funds as “dry powder,” which means the cash reserves poised to re-enter the market once a clear positive signal emerges.

Ed Yardeni hinted that the week ahead would be crucial for bond investors as the “One Big Beautiful Bill,” reaches the Senate for discussions.

“And in the aftermath of Moody’s downgrading the US to “Aaa” on May 16, financial markets will pay close attention to events on Capitol Hill. Namely, how the deficit-bloating “Big, Beautiful Bill” that the House passed last week lands with Senate Republicans, as well as the Bond Vigilantes,” he said.

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on this week:

• On Tuesday, Minneapolis Fed President Neel Kashkari will speak in Tokyo at 4:00 a.m. ET.
• April’s durable goods orders data will be released by 8:30 a.m., and March’s S&P CoreLogic Case-Shiller home price index data for 20 cities will be announced by 9:00 a.m. ET.
• May’s consumer confidence data will be out by 10:00 a.m. and New York Fed President John Williams will speak in Tokyo at 8:00 p.m. ET.
• On Wednesday, Minneapolis Fed President Neel Kashkari will speak in Tokyo again at 4:00 a.m., and minutes of the Fed’s May FOMC meeting will be out by 2:00 p.m. ET.
• On Thursday, the initial jobless claims for the week ending May 24 and the first quarter revised GDP data will be out by 8:30 a.m. ET.
• Richmond Fed President Tom Barkin will speak at 8:30 a.m. ET.
• Pending home sales data for April will be released by 10:00 a.m. ET.
• Chicago Fed President Austan Goolsbee will speak at 10:40 a.m., Fed Governor Adriana Kugler will speak at 2:00 p.m., San Francisco Fed President Mary Daly will speak at 4:00 p.m., and Dallas Fed President Lorie Logan will speak at 8:45 p.m. ET.
• On Friday, April’s headline and core PCE, personal income, and consumer spending will be out by 8:30 a.m. ET.
• April’s advanced U.S. trade balance in goods, advanced retail inventories, and advanced wholesale inventories data will be announced by 8:30 a.m. ET, as well.
• May’s Chicago Business Barometer (PMI) will be released at 9:45 a.m., final consumer sentiment data for May will be out by 10:00 a.m., and San Francisco Fed President Mary Daly will speak at 4:45 p.m. ET.

Stocks In Focus:

• AutoZone Inc. AZO rose 1.61% in premarket on Tuesday as analysts expect it to report quarterly earnings of $37.03 per share on revenue of $4.35 billion, before the opening bell.
• Bank of Nova Scotia. BNS advanced 0.48% as analysts expect it to report quarterly earnings of $1.17 per share on revenue of $6.36 billion, before the opening bell.
• Incannex Healthcare Inc. IXHL jumped 1.16% after announcing that it filed a prospectus supplement to increase the shares offered under its sales agreement to be worth $2.51 million.
• Heico Corp. HEI was up 0.40% as analysts expect it to report quarterly earnings of $1.03 per share on revenue of $1.06 billion, after the closing bell.
• Okta Inc. OKTA was 2.57% higher as analysts expect it to report quarterly earnings of 77 cents per share on revenue of $680.32 million, after the closing bell.
• Diginex Ltd. DGNX surged 22.79% after the company announced the signing of a Memorandum of Understanding for an all-share acquisition of Matter DK ApS.
• Digital Ally Inc. DGLY zoomed 17.20% after it announced a 1-for-100 reverse stock split last week.
• Prothena Corporation PLC PRTA slumped 28.57% after the company disclosed that the Phase 3 AFFIRM-AL clinical trial for Birtamimab in patients with AL Amyloidosis did not meet the primary endpoint.
• Imunon Inc. IMNN plummeted 29.59% after the company reported up to $9.75 million private placement priced at the market under Nasdaq rules.

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading higher in the early New York session by 0.24% to hover around $61.69 per barrel.

Gold Spot US Dollar fell 1.32% to hover around $3,298.74 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was higher by 0.42% at the 99.3510 level.

Asian markets were mixed on Tuesday as South Korea's Kospi, China’s CSI 300, and India's S&P BSE Sensex indices declined, whereas Japan's Nikkei 225, Australia's ASX 200, and Hong Kong's Hang Seng indices rose. European markets were higher in early trade.

Read Next:

• Quantum Computing Stocks In Focus: Pure Play Vs. Large Caps – Here’s A Look At The Valuations
  

Photo courtesy: Shutterstock