U.S. stock futures were mildly mixed Tuesday as the market paused after bank angst subsided.
How are stock-index futures trading
- S&P 500 futures ES00, +0.02% added 4 points, or 0.1%, to 4011
- Dow Jones Industrial Average futures YM00, +0.16% rose 90 points, or 0.3%, to 32721
- Nasdaq 100 futures NQ00, -0.16% eased 32 points, or 0.2%, to 12756
On Monday, the Dow Jones Industrial Average DJIA, +0.60% rose 195 points, or 0.6%, to 32432, the S&P 500 SPX, +0.16% increased 7 points, or 0.16%, to 3978, and the Nasdaq Composite COMP, -0.47% dropped 55 points, or 0.47%, to 11769.
What’s driving markets
Another day without any negatively dramatic news from the financial sector allowed equity markets to mostly stand their ground.
Nasdaq futures are underperforming as the calmer mood is seen reducing demand for those large technology stocks with sturdy balance sheets — such as Microsoft MSFT, -1.49% and Apple AAPL, -1.23% — that have been considered safe havens in recent weeks.
‘’A relief ripple is helping stocks make some gains amid hopes that the volatility, which has wracked the banking sector, has eased off. Futures point to a slightly higher open in…the United States,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“With contagion limited for now, hopes that the debacle will have less of an impact on global growth have ticked up a little. Reports that the flow of deposits from smaller lenders to larger banks in the United States has slowed also appear to have helped sentiment,” Streeter added.
Those reduced concerns about a credit crunch crimping economic activity are helping push up government bond yields. The 2-year Treasury yield TMUBMUSD10Y, 3.568%, which is particularly sensitive to monetary policy, last week fell below 3.6% but was back to 4% on Tuesday.
“Improving risk sentiment saw investors pare back their expectations of Fed rate cuts,” said Jim Reid, strategist at Deutsche Bank.
An important clue to the likely trajectory of Federal Reserve policy will come on Friday when the PCE inflation gauge for February will be published.
Before that, Tuesday will deliver the advanced U.S. trade balance in goods, advanced retail inventories, and advanced wholesale inventories reports for February, due at 8:30 a.m. The January S&P Case-Shiller home price index and the FHFA home price index, will be released at 9 a.m., followed at 10 a.m. by U.S. consumer confidence for March.
Mark Newton, head of technical strategy at Fundstrat observed that the market had proved resilient “at a time when most investors are expecting stock indices to fall” and that traders should note the S&P 500 (SPX) will soon be entering the usually bullish month of April.
“SPX, DJIA and NASDAQ remain largely range-bound near-term as part of their uptrend from 3/13. This sideways “grind” in prices isn’t necessarily bearish; However, a move back above QQQ-314 and SPX 4040 will be necessary to help jump-start the next leg of the rally,” Newton added.
QQQ, -0.69% is the ticker for the Invesco ETF representing the Nasdaq 100.
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