Nasdaq Futures Up 60 Pts; Federal Reserve Meeting Key By Investing.com

By Peter Nurse   

Investing.com – U.S. stocks are seen opening mixed Tuesday, in cautious trading after the record levels on the previous session and ahead of a highly anticipated Federal Reserve meeting.

At 7:05 AM ET (1205 GMT), the Dow Futures contract was down 30 points, or 0.1%, S&P 500 Futures traded 2 points, or 0.1%, higher, and Nasdaq 100 Futures climbed 60 points, or 0.5%.

The Dow Jones Industrial Average rose 0.5% and the S&P 500 gained 0.6%, both closing Monday at new record levels. The Nasdaq Composite ended up 1.1%, the relative outperformer on the back of falling bond yields.

The tech-heavy Nasdaq is set to lead the way again Tuesday, with the 10-year Treasury yield trading just below 1.6%, weakening after hitting its highest level in more than a year above 1.64% on Friday. 

The recent jump in bond yields had prompted a rotation out of the highly-leveraged tech names, as their future cash flows begin to look less attractive relative to other assets.

The main focus this week will be on the Federal Reserve, as the central bank kicks off its two-day meeting later Tuesday. The central bank is not expected to change its extremely accommodative monetary policy stance, but speculation has risen in recent days that its guidance could reflect expectations of a first interest rate hike as early as late-2023, instead of 2024 as expected hitherto.

The U.S. vaccination program hit a milestone this week: more Americans have now received at least one dose than have tested positive for the virus since the pandemic began. 

This points towards a relative early reopening of the economy, and a near-term widening of the economic performance gap: Europe is struggling with a surge in Covid-19 cases and a number of countries in the region have also paused the distribution of the AstraZeneca-Oxford University vaccine.

On the economic data slate, the main release will be February’s retail sales data, due at 8:30 AM ET (1230 GMT), which is expected to show a slow down from January’s sharp 5.3% gain. Also due are industrial production data for February at 9:15 AM ET, and the NAHB housing market index at 10 AM.

Oil prices edged lower Tuesday ahead of key U.S. crude inventory data from the American Petroleum Institute later in the session.

U.S. stockpiles have been rising as production continues a slow recovery from February’s unexpected cold snap in Texas and the surrounding areas. 

U.S. crude futures traded 1.2% lower at $64.62 a barrel, while the Brent contract fell 1.2% to $68.09. Both contracts climbed last week to their highest levels since the start of the pandemic.

Elsewhere, gold futures rose 0.2% to $1,733.05/oz, while EUR/USD traded 0.2% higher at 1.1946.