U.S. Stocks May See More Downside
After the session ends, stocks will likely see further declines in early trading on Tuesday. Major index futures are currently pointing to lower open markets. Dow futures fell 232 points. Concerns about the emergence of a new, more infectious strain of COVID-19 in several parts of the world continue to weigh on markets. Many cities in China are already taking steps to stop the spread of the new strain. That raises fears of another round of painful lockdowns, especially in Shanghai or Beijing. A resurgence of COVID-19 and a renewal of China’s lockdown could put further pressure on the global economy. This has already been compressed by aggressive monetary policy tightening by the world’s central banks.
Investors may also be reluctant to return to the markets ahead of what some expect to be a difficult quarterly earnings season. However, PepsiCo started the earnings season on a positive note; It reported better-than-expected second-quarter results and raised full-year guidance. Financial giants Morgan Stanley, Citigroup, and Wells Fargo are among the companies that will release their quarterly results in the coming days.
After last Friday’s lacklustre performance, US stocks showed a significant move to the downside in Monday’s trading. Major averages are back on track; After early declines, it once again came under pressure at the close. The major averages all finished firmly in negative territory. The Nasdaq fell 262.71 points to 11,372.60. The S&P 500 fell to 3,854.43. The Dow fell 164.31 points or 0.3 percent. In overseas trade, stocks in the Asia-Pacific region were mostly lower in trading on Tuesday. The Nikkei 225 index fell 1.8 percent. The Shanghai Composite was down 1.0 percent.
Major European markets also moved lower. The DAX index fell by 0.9 percent. The FTSE 100 index was up 0.5 percent. The CAC 40 index decreased by 0.4 percent. In commodity trading, crude oil futures fell to $99.20 a barrel. Gold futures rose to $1,732.10 an ounce. On the currency front, the US dollar is trading at 136.76 yen. The dollar is valued at $1.0034 against the euro.