The major U.S. index futures are currently pointing to a modestly lower open on Tuesday, with stocks likely to move to the downside following the mixed performance seen in the previous session.
The Dow futures are down by 0.2 percent, as the blue chip index is likely to give back ground after reaching record highs in the previous session.
Traders may also look to cash in on recent strength in the broader markets ahead of the release of closely watched inflation data later in the week.
The Commerce Department is scheduled to release its report on personal income and spending in the month of July, which includes readings on inflation said to be preferred by the Federal Reserve, on Friday.
Economists currently expected the report to show the annual rate of consumer price growth was unchanged at 2.5 percent, while the annual rate of core consumer price is expected to tick up to 2.7 percent in July from 2.6 percent in June.
While the data is not likely to affect optimism the Fed will lower rates next month, it could impact expectations for how quickly the central bank cuts rates.
During his speech at the Jackson Hole Economic Symposium last Friday, Fed Chair Jerome Powell said the “time has come for policy to adjust” but noted the “timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
The major U.S. stock indexes turned in a mixed performance during trading on Monday, with the Dow reaching a new record closing high, while the tech-heavy Nasdaq saw a notable pullback after posting a strong gain last week.
The Dow pulled back well off its best levels of the session and briefly dipped into negative territory but ended the day up 65.44 points or 0.2 percent at 41,240.52.
Meanwhile, the Nasdaq slid 152.03 points or 0.9 percent to 17,725.77 and the S&P 500 fell 17.77 points or 0.3 percent at 5,616.84.
The modest gain posted by the Dow came amid strong gains by 3M Co. (NYSE:MMM), Coca-Cola (NYSE:KO) and Walt Disney (NYSE:DIS).
On the other hand, substantial weakness among semiconductor stocks weighed on the Nasdaq, with the Philadelphia Semiconductor Index plunging by 2.5 percent.
Within the semiconductor sector, AI darling Nvidia (NASDAQ:NVDA) slumped by 2.3 percent ahead of the release of its fiscal second quarter results after the close of trading on Wednesday.
Computer hardware stocks also showed a notable move to the downside, dragging the NYSE Arca Computer Hardware Index down by 1.3 percent.
At the same time, energy stocks turned in a strong performance as the price of crude oil surged amid geopolitical concerns after Israel and Hezbollah traded a barrage of strikes across the Lebanon border.
On the U.S. economic front, the Commerce Department released a report showing a sharp increase by new orders for U.S. manufactured durable goods in the month of July.
The Commerce Department said durable goods orders spiked by 9.9 percent in July after tumbling by a revised 6.9 percent in June.
Economists had expected durable goods orders to jump by 4.0 percent compared to the 6.7 percent plunge that had been reported for the previous month.
The substantial rebound by durable goods orders came as orders for transportation equipment skyrocketed by 34.8 percent in July after plummeting by 20.6 percent in June.
Excluding the surge in orders for transportation equipment, durable goods orders dipped by 0.2 percent in July after inching up by 0.1 percent in June. Ex-transportation orders were expected to come in unchanged.