Invesco QQQ Trust (NASDAQ:QQQ) and SPDR S&P 500 (ARCA:SPY) Anticipate Bearish Start Today: Unraveling Stock Futures Situation

After soaring to record highs last week, traders are taking a wait-and-see approach as they anticipate a series of upcoming market-moving events. Following Monday’s pullback, stock futures are trading slightly down on Tuesday morning, with mega-cap tech leading the decline.

Analysts suggest this pre-market weakness may reflect traders taking profits ahead of key events this week, including Federal Reserve Chair Jerome Powell‘s Congressional testimony.

Cues From Monday’s Session:

Stocks reversed course on Monday, with concerns about overbought conditions prompting investors to exercise caution.

The major averages opened lower and remained mostly flat throughout the day, except for a brief rally in late afternoon trading.

The S&P 500 and the Nasdaq Composite retreated from their all-time highs, while small-cap stocks in the Russell 2,000 Index showed stronger resilience, only declining in late trading.

Defensive sectors like utilities and real estate led the gains, while communication services, consumer discretionary, and energy stocks faced significant selling pressure.

A fund manager on Monday reaffirmed his bullish stance on equities. “While some investors are now questioning the strength across so many market sectors, and the surprising lack of hedging for an inevitable correction, it is interesting to note that historically, when the S&P is up in the first 2 months of the year, it has a positive full-year return 96% of the time, with an annual increase of 20.2%,” said Louis Navellier.

“When a pullback comes, it seems likely that money will flow off the sidelines seeing it as a buying opportunity. The trend remains clearly positive.”

“So far, 2024 has shaped up to be similar to 1999, which was the last year when most ‘smid’ cap stocks more than doubled,” Navellier said. “I am very hopeful that 2024 will be even better than 1999, so hang on and enjoy the ride.”

Futures Today

Futures Performance On Tuesday ( as of 6 a.m. ET)

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) slipped 0.25% to $511.02 and the Invesco QQQ ETF (NASDAQ:QQQ) declined 0.61% to $441.32, according to Benzinga Pro data.

Upcoming Economic Data:

The Commerce Department is due to release its factory goods orders report for January at 10 a.m. ET. Economists, on average, call for a 3.1% month-over-month drop in factory goods orders following a 0.2% increase in December. The Commerce Department said last week durable goods, which make up the bulk of factory goods orders, fell 6.1% in January. Much of the decline was due to weak transportation orders. Excluding the volatile transportation orders, durable goods orders fell a more modest 0.3%.

S&P Global’s final U.S. service sector purchasing managers’ index, due at 9:45 a.m. ET, is expected at 51.4 for February versus 52.4 in January.

The Institute of Supply Management will release the results of its non-manufacturing survey for February at 10 a.m. ET. The non-manufacturing PMI is likely to come in at 53, down from 533.4 in January.

Fed Vice Chair for Supervision Michael Barr is scheduled to speak at noon ET and 3:30 p.m. ET.

See also: Best Futures Trading Software

Stocks In Focus:

• AeroVironment, Inc. (NASDAQ:AVAV) jumped over 18.5% in premarket trading following the company’s quarterly earnings announcement.
• Among the other stocks reacting to earnings are GitLab Inc. (NASDAQ:GTLB) (down over 24%), Paymentus Holdings, Inc. (NYSE:PAY) (up over 18%) and Stitch Fix, Inc. (NASDAQ:SFIX) (down over 13%.
• Target Corp. (NYSE:TGT) is due to report its quarterly results ahead of the market open, while Nordstrom, Inc. (NYSE:JWN), Ross Stores, Inc. (NASDAQ:ROST), Box, Inc. (NYSE:BOX), CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and ChargePoint Holdings, Inc. (NYSE:CHPT) will report after the close.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures edged down 0.09% to $78.67 in early European session on Tuesday after the commodity fell 1.54% on Monday. The yield on the benchmark 10-year Treasury note fell 0.031 percentage points to 4.188%.

Asian stocks closed mostly lower, as they took cues from the negative close on Wall Street overnight. The Hong Kong market fell by the most, with most other markets seeing modest losses. On the other hand, the Chinese, New Zealand, and Taiwanese markets bucked the downtrend.

The major European markets showed nervousness in early trading on Tuesday.

Among the other financial markets, gold futures extended their gains to hit new highs and the cryptocurrency rally continued, led by Bitcoin (CRYPTO: BTC). The apex crypto is trading shy of the $67,000 level.

See Also: Gold Breaks Above $2,110, Inches Closer To Record High, With Rallying Mining Stocks

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