Dow Futures Up 30 Pts; Housing, PMI Data in Focus

© Reuters

By Peter Nurse

AiVIF.com -- U.S. stocks are seen opening marginally higher Tuesday, bouncing to a degree after their worst day since June on mounting rate hike concerns.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up 30 points, or 0.1%, S&P 500 Futures traded 7 points, or 0.2% higher, and Nasdaq 100 Futures climbed 20 points, or 0.2%.

The main Wall Street indices closed sharply lower Monday, with the blue-chip Dow Jones Industrial Average dropping over 600 points, or 1.9%, the broad-based S&P 500 falling 2.1%, both suffering their biggest daily losses since June 16. The tech-heavy Nasdaq Composite ended 2.6% lower, its biggest loss since June 28.

The summer rally appears to be fading, with aggressive interest rate hikes by the Federal Reserve putting an end to the global growth story. Additionally, hopes that the U.S. central bank could reduce the pace of its rate hikes in September were dulled by hawkish comments from a number of policymakers last week. 

A majority of market participants now expect the Fed to raise rates by 75 basis points in September, data from exchange operator CME Group showed on Tuesday.

This puts the focus on Fed Chairman Jay Powell’s speech in Jackson Hole, Wyoming on Friday for clues on the future path of U.S. interest rates.

Data due Tuesday includes new home sales for July, which should shed more light on the cooling housing market, and PMI numbers for August. 

The equivalent PMI data in Europe pointed to the region's two largest economies both probably contracting in August, as the region's energy crisis generated increasingly stiff headwinds.

Back on Wall Street, the earnings season continues Tuesday with results from Macy’s (NYSE:M), Nordstrom (NYSE:JWN), and Dick’s Sporting Goods (NYSE:DKS). 

Additionally, Zoom Video Communications (NASDAQ:ZM) stock slumped over 10% premarket after the company cut its annual profit and revenue forecasts as demand for the video-conferencing platform cools off from pandemic highs.

On the flip side, Palo Alto Networks (NASDAQ:PANW) stock rose 9% premarket after the cybersecurity company reported better than expected fourth-quarter results, led by a surge in billings amid growing cybersecurity demand. 

Oil prices rose Tuesday after Saudi Arabia indicated that the Organization of the Petroleum Exporting Countries is prepared to reduce production to correct the recent oil price fall.

The cartel has reversed all of the output cuts made during the pandemic, during a period of extreme volatility since Russia’s invasion of Ukraine disrupted the usual flows.

Underlining tight supply, the first of this week's two reports on U.S. inventories, from the American Petroleum Institute, is due later in the session.

By 07:00 ET, U.S. crude futures traded 1.9% higher at $92.08 a barrel, while the Brent contract rose 1.5% to $97.97. Both benchmarks are down around 5% over the last month, having both traded over $100 a barrel.

Additionally, gold futures rose 0.1% to $1,749.90/oz, while EUR/USD traded 0.2% lower at 0.9923.