U.S. stocks could open on a negative note on Tuesday after the averages scaled record highs last week. Futures of all three major indices were slightly down on Tuesday, pointing to a cautious sentiment on Wall Street.
The three major indices surged over 4% last week after the GOP sweep and the Federal Reserve delivered a widely expected 25 basis point rate cut. Investors could be looking to book profits in the meantime even as experts say there's gas left in the current equity bull run.
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.35% |
| S&P 500 | -0.29% |
| Dow Jones | -0.19% |
| R2K | -0.80% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.23% to $597.41 and the Invesco QQQ ETF (NASDAQ:QQQ) declined 0.28% to $512.40, according to Benzinga Pro data.
Cues From Last Session:
The Dow Jones scaled the 44,000 mark on Monday for the first time, closing the day up by over 300 points to end the day at 44,293.13.
Crude oil prices remained under the $70 mark as the risk of Hurricane Rafael receded, providing relief.
Treasury yields continued to rise, signaling concerns that the next administration might struggle with fiscal discipline.
Most sectors on the S&P 500 closed on a positive note, with consumer discretionary, financials, and industrials stocks recording the biggest gains on Monday.
However, information technology and real estate stocks bucked the overall market trend, closing the session lower.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.06% | 19,298.76 |
| S&P 500 | 0.10% | 6,001.35 |
| Dow Jones | 0.69% | 44,293.13 |
| Russell 2000 | 1.47% | 2,434.98 |
Insights From Analysts:
Ryan Detrick, chief market strategist at Carson Group, agreed with FundStrat's Tom Lee on the potential for small-cap stocks to grow further.
"Good to see @fundstrat sticking with the small caps and cyclical themes. We are right there with him," Detrick said.
Earlier, Lee said "there's still a lot of upside" in small-cap stocks, adding, "So I think small-caps could, over the next couple of years, outperform by more than 100%."
WisdomTree and Wharton School economist Jeremy Siegel continued to stress that the equity markets have enough gas in them to continue the ongoing bull run.
"The ‘bull market' sentiment remains intact, though valuations remain a watchpoint," he said, adding that the expectations of "lighter regulations" from President-elect Donald Trump's administration would benefit equities.
"Corporate earnings have continued to impress, and with no immediate breakdowns in tech's big players, I do not see a downturn for equities in the near term. With inflation easing on essential items like oil and ongoing global cooling in commodity prices, the environment is favorable for continued economic stability."
"The bull market in stocks looks set to continue, while bonds face a rougher road," Siegel said but noted that the gains that equity investors have been seeing this year are unlikely to repeat in 2025.
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Upcoming Economic Data
Tuesday's economic calendar is fairly light.
- Fed Gov. Christopher Waller will speak at 10 a.m. ET.
- Richmond Fed President Tom Barkin will speak at 10:15 a.m. ET.
- Philadelphia President Patrick Harker will speak at 10 a.m. ET.
Stocks In Focus:
- Tesla Inc. (NASDAQ:TSLA) shares continued to rally, gaining nearly 9% on Monday. However, in premarket trading on Tuesday, the EV giant's shares were down nearly 2.9%.
- Trump Media & Technology Group Corp. (NASDAQ:DJT) shares were down over 5.6% in premarket trading.
- Live Nation Entertainment Inc. (NYSE:LYV) shares were up over 6.6% in premarket trading after the Ticketmaster parent beat market expectations and said it is looking toward an "even bigger 2025."
- MicroStrategy Inc. (NASDAQ:MSTR), Coinbase Global Inc. (NASDAQ:COIN), and Robinhood Markets Inc. (NASDAQ:HOOD) surged between 7% to 26% after Bitcoin (CRYPTO: BTC) continued to set new highs.
- Investors are awaiting earnings results from Tyson Foods, Inc. (NYSE:TSN), The Home Depot, Inc. (NYSE:HD), and Occidental Petroleum Corporation (NYSE:OXY) today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures surged in the early New York session, rising by 0.7% to hover around $68.50 per barrel.
The 10-year Treasury note yield surged to 4.355%.
Major Asian markets ended in the red on Tuesday, and European stocks showed weakness as well in early trading.
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Photo courtesy: Wikimedia
