Monday’s stock rally, while impressive, may face a brief respite as index futures hint at a potential return to the downtrend on Tuesday. Traders are approaching the market with caution, evaluating the gains from the previous session. The upcoming days hold several crucial catalysts, with the focus shifting to the Wednesday release of the consumer price inflation report and Friday’s eagerly anticipated big bank earnings.
Despite the cautious mood, potential factors like a billion-dollar tech merger and the swirling optimism around a spot Bitcoin BTC/USD exchange-traded fund approval, coupled with the spike in oil prices, could inject some buying activity.
Cues From Monday’s Trading:
Monday witnessed a robust advancement in U.S. stocks, driven by a strong rebound in the technology sector, lifting the broader market. Both the S&P 500 Index and the Nasdaq Composite started on a positive note, steadily gaining momentum throughout the session and closing with substantial increases.
The Dow Industrials, comprising 30 stocks, initially faced a setback, primarily due to Boeing Co. BA dragging down the index. This followed federal regulators’ recommendation to ground 737 Max 9s after an Alaska Air Group, Inc. ALK plane experienced a midflight blowout. However, the index managed to recover from the early dip and concluded with a modest gain. Apple, Inc. AAPL, Intel Corp. INTC, Salesforce, Inc. CRM, and Walgreens Boots Alliance, Inc. WBA spearheaded the rebound in the Dow.
US Index Performance On Monday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +2.20% | 14,843.77 |
| S&P 500 Index | +1.41% | 4,763.54 |
| Dow Industrials | +0.58% | 37,683.01 |
| Russell 2000 | +1.94% | 1,989.01 |
Analyst Color:
Chris Fasciano, Portfolio Manager at Commonwealth Financial Network, sees opportunities for investors in the new year despite the headwinds. “The good news as we enter 2024 is that a quieter year in interest rates should lead to more opportunities for investors to add value and give more breadth to the market than we have seen recently,” he said.
”But it, too, will come with its own set of uncertainties for portfolio managers as they chart the course ahead,” the analyst said. He, however, remains confident that after several years of volatility within markets, the “opportunity set is broader today than in the recent past,” he added.
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.69% |
| S&P 500 | -0.49% |
| Dow | -0.47% |
| R2K | -1.37% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY fell 0.46% to $472.42 and the Invesco QQQ ETF QQQ slid 0.63% to $402.40, according to Benzinga Pro data.
Upcoming Economic Data:
The Commerce Department is scheduled to release the trade balance report for November at 8:30 a.m. ET. Economists, on average, expect the trade deficit to have widened slightly from October’s $64.3 to $65 billion.
Fed Vice Chair for Supervision Michael Barr is due to speak at noon ET.
Also at noon ET, the Energy Information Administration will release its short-term energy outlook report.
The Treasury will auction three-year notes at 1 p.m. ET.
See also: Futures Vs. Options
Stocks In Focus:
- Shares of Juniper Networks, Inc. JNPR rallied over 22% in premarket trading after a Wall Street Journal report said the company is close to being acquired by Hewlett Packard Enterprise Company HPE. The latter’s shares fell over 10%.
- Match Group, Inc. MTCH climbed over 10% in reaction to another Journal report that said activist investor Elliott Management has built a stake in the company, which owns dating platforms such as Tinder.
- Shares of consumer electronics companies and suppliers to these companies could be in the spotlight as the four-day 2024 International CES gets underway on Tuesday.
- News flow out of the JPMorgan Healthcare Conference could move biopharma and healthcare stocks.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures climbed 1.98% to $72.17 in the early European session on Tuesday following the 4%+ slump in the previous session.
The benchmark 10-year Treasury note climbed 0.044 percentage points to 4.046% on Tuesday.
The major Asian markets ended mostly higher, led by Japan, as traders in the region looked ahead to the key U.S. events scheduled for the week, including the inflation data. Tech stocks in the region followed their Wall Street peers after AI stalwart Nvidia Corp. NVDA ended at a new high.
European stocks traded lower by late-morning trading
In the currency market, the dollar’s strength continued as the greenback edged higher against most major currencies, save the yen. The dollar’s firmness reflected expectations that the Fed may not cut rates until the second half of the year.
Most cryptocurrencies are rallying amid hopes SEC approval for a spot Bitcoin ETF may come as soon as Wednesday. The Bitcoin shot past the $46,500 mark and rose nearly 4.5% over the past 24 hours.
Read Next: Earnings Season Preview: How Will Corporate Profit Outlooks Impact Markets In 2024?
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