Dow Futures Down 205 Pts; Pelosi Visit to Taiwan Raises Tensions
2022.08.02 14:58
By Peter Nurse
Investing.com — U.S. stocks are seen opening lower Tuesday, with geopolitical tensions adding to the subdued start to the new month ahead of the release of more quarterly corporate earnings.
At 07:00 AM ET (1100 GMT), the Dow Futures contract was down 205 points, or 0.6%, S&P 500 Futures traded 30 points, or 0.8% lower, and Nasdaq 100 Futures dropped 110 points, or 0.9%.
The main Wall Street indices closed with small losses Monday, handing back some of July’s gains, when the averages recorded their best month since late 2020.
Weighing on risk appetite Tuesday was the expectation that U.S. House Speaker Nancy Pelosi will visit Taiwan, an island that China claims as part of its territory, later in the session.
Such a move would raise tensions between the globe’s two economic superpowers, with Beijing promising “grave consequences” for the visit by the highest-ranking U.S. official in recent memory.
That said, any losses are relatively minor with investor enthusiasm reasonably high given better than expected earnings despite economic challenges and the belief the Federal Reserve is set to ease off its aggressive interest rate hikes.
More earnings are due Tuesday, with industrial bellwether Caterpillar (NYSE:CAT) reporting a higher second-quarter adjusted profit, as increased equipment prices helped soften the blow from elevated freight and raw material costs
The likes of Starbucks (NASDAQ:SBUX), PayPal (NASDAQ:PYPL), and Advanced Micro Devices (NASDAQ:AMD) are also set to issue quarterly results, while Pinterest (NYSE:PINS) will be in the spotlight as well after Elliott Investment Management disclosed Monday it had become the largest shareholder in the image sharing service.
Tuesday also brings data on job openings for last month, with analysts expecting a reading of 11 million. This will act as an important gauge ahead of Friday’s official monthly jobs report, especially with Fed officials’ monetary policy thinking becoming more data-dependent.
Oil prices dropped Tuesday, continuing the previous session’s selloff on fears a global manufacturing downturn will hit demand ahead of a meeting of top producers to discuss future output.
The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, is set to meet on Wednesday to discuss future supply.
The group had recently rolled back pandemic-era cuts to oil supply, and is now expected to keep production steady despite pressure from the United States to increase output.
Ahead of this, the American Petroleum Institute is set to release its latest weekly reading of U.S. inventories later in the session.
By 07:00 AM ET, U.S. crude futures traded 0.6% lower at $93.33 a barrel, while the Brent contract fell 0.5% to $99.53.
Additionally, gold futures traded 0.2% higher at $1,790.30/oz, while EUR/USD traded 0.3% lower at 1.0228.
