The major U.S. index futures are currently pointing to a modestly lower open on Tuesday, with stocks likely to give back ground following the strong upward move seen over the course of the previous session.
Traders may look to cash in on the rally seen late in Monday’s trading, which lifted the Dow and the S&P 500 to new record closing highs.
Uncertainty ahead of the Federal Reserve’s monetary policy announcement on Wednesday may inspire some traders to book profits.
The Fed is widely expected to leave interest rates unchanged, but the accompanying statement could have a significant impact on the outlook for rates.
Optimism about a March rate cut has faded recently, with many economists now suggesting the Fed will wait until May to begin lowering rates.
A steep drop by shares of UPS (UPS) may also weigh on Wall Street, as the delivery giant is plunging by 6.2 percent in pre-market trading.
UPS is under pressure after reporting weaker than expected fourth quarter revenues and providing disappointing 2024 guidance.
On the other hand, shares of General Motors (GM) are surging by 7.5 percent in pre-market trading after the auto giant reported fourth quarter results that beat expectations and offered a bullish profit outlook for 2024.
Google parent Alphabet (GOOGL) and software giant Microsoft (MSFT) are among the companied due to report their quarterly results after the close of today’s trading.
After showing a lack of direction early in the session, stocks moved mostly higher over the course of the trading day on Monday. With the upward move, the Dow and the S&P 500 set new record closing highs, while the Nasdaq reached its best closing level in two years.
The major averages rallied to new highs for the session in the final hour of trading. The Dow climbed 224.02 points or 0.6 percent to 38,333.45, the Nasdaq jumped 172.68 points or 1.1 percent to 15,628.04 and the S&P 500 advanced 36.96 points or 0.8 percent to 4,927.93.
The strength that emerged on Wall Street may partly have reflected a notable pullback by treasury yields, with yields giving back ground after moving higher last Friday.
Yields fell to new lows and stocks rallied late in the session as the Treasury Department reduced its estimates for first quarter borrowing.
The Treasury said it expects to borrow $760 billion in the first quarter; $55 billion lower than forecast in October due to projections of higher net fiscal flows and a higher beginning of quarter cash balance.
Earlier in the day, traders seemed reluctant to make significant ahead of several key events this week, including the Federal Reserve’s monetary policy announcement on Wednesday.
While the Fed is widely expected to leave interest rates unchanged, traders will be looking for clues about the likelihood of rate cuts at upcoming meetings.
Recent economic data has led many economists to believe the Fed is unlikely to cut rates in March, as traders had previously hoped.
The Labor Department’s closely watched monthly jobs report is also due to be released later this week along with reports on initial jobless claims, labor productivity and costs and manufacturing activity.
Software stocks showed a strong move to the upside over the course of the session, driving the Dow Jones U.S. Software Index up by 1.7 percent to a record closing high.
Considerable strength also emerged among gold stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the sector came amid a modest increase by the price of gold.
Biotechnology, networking and semiconductor stocks also moved notably higher as the day progressed, contributing to the surge by the tech-heavy Nasdaq.
On the other hand, airline stocks moved sharply lower on the day, dragging the NYSE Arca Airline Index down by 2.2 percent.