The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to move back to the upside following the weakness seen in the previous session.
Traders may look to pick up stocks at somewhat reduced levels following the steep drop seen during trading on Monday.
Overall trading activity is likely to remain somewhat subdued, however, as traders look ahead to the release of key inflation data in the coming days.
U.S. stocks fell on Monday amid easing prospects of aggressive rate cuts by the Federal Reserve following a much higher than expected addition in U.S. non-payroll employment in the month of September.
Investors also awaited earnings announcements from major banks and some crucial economic data, including readings on consumer price and producer price inflation.
The major averages all closed notably lower. The Dow tumbled 398.51 points or 0.9 percent to 41,954.24, the S&P 500 closed down 55.13 points or 1.0 percent at 5,695.94, while the Nasdaq recorded a more pronounced drop, falling by 213.95 points or 1.2 percent to settle at 17,923.90.
After Friday’s upbeat jobs data, traders now expect only a quarter-point cut in interest rates at the Federal Reserve’s next policy announcement on November 7, with a small chance that the policy rate stays unchanged.
On the geopolitical front, Israeli defense forces intensified air strikes targeting Gaza and the Lebanese capital of Beirut simultaneously on the first anniversary of Hamas’ cross-border attack in Israel, which triggered the Middle East war.
Dozens were killed in air strikes on a mosque and a now defunct school, which were converted as refugee relief shelters Sunday, according to Gaza’s Hamas-run health ministry. The Israeli military says Hamas militants were hiding there.
Apple Inc., Microsoft Corporation, Alphabet, Amazon, Meta Platform, Berkshire Hathaway, Tesla, Walmart, Visa, Procter & Gamble, Netflix, Coca-Cola, Salesforce, Merck, Accenture, Walt Disney, Nike, KKR and ADP lost 1 to 4 percent.
Pfizer climbed more than 2 percent. Abott, IBM, Eli Lilly & Co., NVIDIA Corporation and Exxon Mobil also closed higher.