Futures tied to the major U.S. stock indices are pointing to a higher open on Tuesday, suggesting equities could extend the momentum built in the previous session.
Early strength is being driven in part by a sharp move in Palantir Technologies (NASDAQ:PLTR), with the AI-focused software company jumping about 11.7% in premarket trading. The rally follows the release of stronger-than-expected fourth-quarter results and guidance that exceeded market expectations.
Mining stocks are also poised for a positive start, as gold and silver prices have rebounded sharply after a recent selloff, lifting sentiment across the sector.
That said, upside could be tempered as investors monitor political developments in Washington, where the House of Representatives is scheduled to vote on a funding bill aimed at ending the partial government shutdown.
The shutdown has already prompted the Labor Department to delay the release of its job openings report due this morning, as well as the closely watched monthly employment report that had been slated for Friday.
After a choppy performance last week, U.S. stocks moved mostly higher on Monday. All three major indices finished in positive territory, with the Dow posting the strongest advance. Although the benchmarks eased off their intraday highs late in the session, gains were largely intact. The Dow rose 515.19 points, or 1.1%, to 49,407.66, the Nasdaq added 130.29 points, or 0.6%, to 23,592.11, and the S&P 500 climbed 37.41 points, or 0.5%, to 6,976.44.
The advance was supported by fresh economic data from the Institute for Supply Management, which showed U.S. manufacturing activity unexpectedly returned to expansion in January for the first time in a year. The ISM manufacturing PMI jumped to 52.6 from 47.9 in December, well above the 50 threshold that signals growth and ahead of expectations for a reading of 48.5.
The stronger data helped investors look past lingering trade concerns and renewed uncertainty around the outlook for U.S. monetary policy. Sentiment was also buoyed by signs of easing tensions between the U.S. and Iran, following reports that Tehran is open to talks with Washington over its nuclear program.
Markets drew further support after President Donald Trump said in a post on Truth Social that the U.S. had reached a trade agreement with India. Following a conversation with Indian Prime Minister Narendra Modi, Trump said reciprocal U.S. tariffs on India would be cut to 18% from 25%, while India would reportedly reduce both tariff and non-tariff barriers on U.S. goods to zero.
Despite the upbeat tone, investors appeared cautious about making larger bets ahead of the Labor Department’s monthly jobs report, expected Friday. The data is forecast to show payroll growth of 70,000 jobs in January, up from 50,000 in December, and could influence expectations for interest rates.
Sector-wise, airline stocks led the market higher, with the NYSE Arca Airline Index surging 4.3%. Computer hardware stocks also performed strongly, reflected in a 4.2% jump in the NYSE Arca Computer Hardware Index.
Banks, semiconductor names and retailers also posted solid gains, while energy stocks lagged the broader market as crude oil prices fell sharply.