Dow Futures Down 90 Pts; Services PMI Data, Twitter in Focus
2022.04.05 14:22
By Peter Nurse
Investing.com — U.S. stocks are seen opening marginally lower Tuesday, with investors taking a cautious stance ahead of the minutes of the last Federal Reserve meeting, the start of the new earnings season and the continuing war in Ukraine.
At 7 AM ET (1100 GMT), the Dow Futures contract was down 90 points, or 0.3%, S&P 500 Futures traded 10 points, or 0.2%, lower and Nasdaq 100 Futures dropped 35 points, or 0.2%.
The main Wall Street indices closed higher Monday, with the tech-heavy Nasdaq Composite leading the way, ending up 1.9%, helped by Twitter (NYSE:TWTR) stock gaining nearly 30% after billionaire Elon Musk took a 9.2% stake in the social media giant.
Investors are focusing this week on Wednesday’s release of the minutes of the Federal Reserve’s March meeting. Expectations are growing that the central bank will move more aggressively at its meeting in May, after hiking by 25 basis points in March, especially after a jobs report that showed an unemployment rate falling to a new two-year low of 3.6%.
Ahead of the minutes, Tuesday sees the release of ISM’s non-manufacturing PMI data for March, at 10:00 AM EST (1400 GMT), which is expected to show increased momentum in March. Speeches from Fed policymakers Neel Kashkari, Lael Brainard and John Williams will also be closely studied.
The first-quarter corporate earnings season is set to begin next week, with companies having to cope with the ramifications of the Ukraine conflict, in addition to soaring commodity prices and supply chain constraints.
The estimated earnings growth rate for the S&P 500 for the first quarter of 2022 is 4.7%, according to data from FactSet, which would mark the lowest earnings growth rate since the fourth quarter of 2020.
Twitter will remain in focus after Musk posted a poll asking users of the social media platform if they wanted an edit button, just hours after taking his hefty stake in the company.
Investors will also continue to keep an eye on the latest developments in Ukraine, with reports suggesting the European Commission is set to propose that Russian coal is part of a new round of sanctions following mounting evidence of atrocities committed by Russian troops on Ukrainian civilians.
Oil prices traded higher Tuesday on the prospect of these additional sanctions on Russia, adding to the strong gains seen in the previous session.
Additionally, the industry body American Petroleum Institute reports its weekly inventory data later in the session, after recording a drop of 3 million barrels last week.
By 7 AM ET, U.S. crude futures traded 1.4% higher at $104.67 a barrel, while the Brent contract rose 1.2% to $108.82. Both contracts settled more than 3% higher on Monday.
Additionally, gold futures fell 0.3% to $1,929.15/oz, while EUR/USD traded marginally lower at 1.0967.
