U.S. stock futures were lower as the Nasdaq 100 index fell on Tuesday following Monday’s mixed close.
Inflation fears gripped Wall Street as Ed Yardeni anticipated an imminent policy shift, noting that recent CPI and PPI data suggest the Fed is currently "behind the curve" on inflation. He expects the central bank to completely drop its easing stance and adopt a "tightening bias" at its upcoming June meeting, followed by a 25-basis-point rate hike in July.
Meanwhile, the 10-year Treasury bond yielded 4.60%, and the two-year bond was at 4.06%. The CME Group's FedWatch tool‘s projections show markets pricing a 98.8% likelihood of the Federal Reserve leaving the current interest rates unchanged during June’s meeting.
| Index | Performance (+/-) |
| Dow Jones | -0.02% |
| S&P 500 | -0.13% |
| Nasdaq 100 | -0.24% |
| Russell 2000 | -0.09% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100, respectively, were lower in premarket on Tuesday. The SPY was down 0.16% at $737.49, while the QQQ was lower by 0.36% to $703.35.
Stocks In Focus
XP
- XP Inc. (NASDAQ:XP) was 6% lower in premarket on Tuesday as it reported worse-than-expected first-quarter financial results. The company also named Gustavo Alejo Viviani as CFO starting Aug. 3.
- Benzinga’s Edge Stock Rankings indicate that XP maintains a weak price trend in the long term, short, and medium terms, with a solid value score.
Akamai Technologies
- Akamai Technologies Inc. (NASDAQ:AKAM) declined 2.50% after announcing plans to commence a $1.3 billion senior notes offering.
- Benzinga’s Edge Stock Rankings indicate that AKAM maintains a strong price trend in the long, medium, and short terms, with a moderate growth score.
Atmos Energy
- Atmos Energy Corp. (NYSE:ATO) jumped 10.13% following its strong second-quarter earnings with a net income of $581.9 million and raised its annual dividend by 14.9% to $4.00 per share.
- Benzinga’s Edge Stock Rankings indicate that ATO maintains a strong price trend in the long term but a weak trend in the short and medium terms, with a moderate quality score.
General Electric
- General Electric Co. (NYSE:GE) was up 0.17% as Japan Airlines Co. Ltd. signed a 10-year maintenance and overhaul deal with GE Aerospace to cover its Boeing 787 fleet.
- Benzinga’s Edge Stock Rankings indicate that GE maintains a weak price trend in the short, medium, and long terms, with a moderate growth ranking.
Toll Brothers
- Toll Brothers Inc. (NYSE:TOL) declined 0.13% as analysts expect it to report earnings of $2.58 per share on revenue of $2.41 billion after the closing bell.
- Benzinga’s Edge Stock Rankings indicate that TOL maintains a weak price trend in the long, medium, and short terms, with a solid value score.
Cues From Last Session
Energy, financial, and consumer staples stocks recorded the biggest gains on Monday as most S&P 500 sectors closed on a positive note. Meanwhile, information technology and industrials stocks closed the session lower.
| Index | Performance (+/-) | Value |
| Dow Jones | 0.32% | 49,686.12 |
| S&P 500 | -0.074% | 7,403.05 |
| Nasdaq Composite | -0.51% | 26,090.73 |
| Russell 2000 | -0.65% | 2,775.10 |
Insights From Analysts
According to Jeffrey Roach, Chief Economist at LPL Financial, the U.S. economy “muddles on” despite facing localized headwinds. While geopolitical tensions in the Middle East dominate investor focus, Roach expects the economic expansion to remain resilient.
He notes that “the growth hit remains manageable and should fade as trade adjusts with the economy likely skirting recession.” Under his team’s baseline expectations, supply chain frictions are forecast to subtract 0.2 percentage points from second-quarter real GDP and 0.3 percentage points from the third quarter.
Crucially, Roach believes these pressures “pose a greater risk to inflation than to economic growth.” If the conflict persists through the summer, it could plausibly add a full percentage point to inflation this year.
Regarding the U.S. stock market, diplomatic negotiations have supported equities. Given the improving macroeconomic backdrop, Roach’s committee recently moved its recommendation to a “tactical overweight” for equities.
Upcoming Economic Data
Here's what investors will be keeping an eye on Tuesday.
- April’s pending home sales data will be released by 10:00 a.m., Philadelphia Fed President Anna Paulson will speak at 7:00 p.m., and Atlanta Fed First Vice President Cheryl Venable will deliver closing remarks at 7:45 p.m. ET.
Commodities, Crypto, And Global Equity Markets
Crude oil futures were trading lower in the early New York session by 1.24% to hover around $103.09 per barrel.
Gold Spot US Dollar fell 0.45% to hover around $4,545.43 per ounce. Its last record high stood at $5,595.46 per ounce. The U.S. Dollar Index spot was 0.01% higher at the 99.2060 level.
Meanwhile, Bitcoin (CRYPTO: BTC) was trading 0.31% higher at $77,105.03 per coin, as per the last 24 hours.
Asian markets closed mixed on Tuesday, as Japan's Nikkei 225 and South Korea's Kospi indices fell. While Australia's ASX 200, India’s Nifty 50, China’s CSI 300, and Hong Kong's Hang Seng indices rose. European markets were higher in early trade.
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