Futures Pointing To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks poised to extend a recent upward trend.

The markets may continue to benefit from recent upward momentum, which led the Dow and the S&P 500 to close higher for the fourth straight session on Monday.

Yesterday’s gains lifted the Dow and the S&P 500 to their best closing levels in over a month, while the Nasdaq is just off the six-month closing high set last Friday.

Energy stocks may lead the way higher once again, as the price of crude oil is seeing further upside after soaring on Monday following OPEC+’s output reduction.

Overall trading may be somewhat subdued, however, as traders look ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.

U.S. stocks ended mostly higher on Monday, with those from the energy sector rallying sharply after a surprise production cut announcement by the OPEC+ lifted crude oil prices.

Among the major averages, the Dow ended notably higher after staying firm throughout the day’s session. The S&P finished modestly higher after a choppy ride, while the Nasdaq trimmed its losses and settled well off the day’s lows.

The Dow settled with a gain of 327.00 points or 1.0 percent at 33,601.15. The S&P 500 ended up 15.20 points or 0.4 percent at 4,124.51, but the Nasdaq ended lower by 32.45 points or 0.3 percent at 12,189.45.

The Organization of the Petroleum Exporting Countries and their oil-producing allies announced their decision to reduce output by 1.16 million barrels per day. The group said the production cut would come into effect from May and last until the end of the year.

Saudi officials claimed the unexpected cut was a “precautionary measure aimed at supporting the stability of the oil market.”

The sharp jump in oil prices has raised concerns about inflation and the outlook for interest rates.

On the U.S. economic front, the Institute for Supply Management released a report showing manufacturing activity in the U.S. contracted at a slightly faster rate in the month of March.

The ISM said its manufacturing PMI dipped to 46.3 in March from 47.7 in February, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.5.

With the bigger than expected decrease, the manufacturing PMI dropped to its lowest level since hitting 43.5 in May 2020.

Commodity, Currency Markets

Crude oil futures are rising $0.56 to $80.98 a barrel after skyrocketing $4.75 to $80.42 a barrel on Monday. Meanwhile, after climbing $14.20 to $2,000.40 an ounce in the previous session, gold futures are inching up $0.20 to $2,000.60 an ounce.

On the currency front, the U.S. dollar is trading at 132.87 yen compared to the 132.46 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0898 compared to yesterday’s $1.0899.

Asia

Asian stocks rose broadly on Tuesday even as rising oil prices revived worries about inflation and weak U.S. manufacturing data added to the gloom surrounding the U.S. economy.

A gauge of U.S. manufacturing activity slumped in March to the lowest level in nearly three years due to tighter credit conditions, spurring bets that a U.S. recession is around the corner.

The U.S. dollar regained some ground and Treasury yields held declines amid renewed anxiety about the economy, while gold slipped after rising 1 percent in the previous session.

Oil prices rose further in Asian trading after scoring big gains on Monday in the wake of the surprise cuts to the OPEC+ group’s oil output targets.

Chinese shares closed higher on the back of continued gains in artificial intelligence-related stocks. The Shanghai Composite Index rose 0.5 percent to 3,312.56 ahead of the Qingming Festival holiday on Wednesday.

Hong Kong’s Hang Seng Index slid 0.7 percent to 20,274.59 as technology stocks dropped amid rising Sino-U.S. tensions.

China has warned of “further damage” to bilateral relations ahead of a Wednesday meeting between Taiwan’s President Tsai Ing-wen and U.S. House Speaker Kevin McCarthy.

Japanese shares rose modestly to extend gains for a third day running, led by energy explorers, utilities and shipping firms. Kansai Electric Power, Mitsui OSK Lines and Kawasaki Kisen climbed 2-3 percent.

Clothing retailer Shimamura plunged 5.5 percent after its forecast for annual operating profit came in below analyst estimates.

The Nikkei 225 Index edged up 0.4 percent to 28,287.42, while the broader Topix ended 0.3 percent higher at 2,022.76.

Seoul stocks rose as data showed consumer inflation in the country eased to a one-year low in March, led by weaker oil prices.

The Kospi rose 0.3 percent to 2,480.51, led by tech, auto and refiner stocks. Leading steelmaker POSCO led losses to close 6.4 percent lower at 367,000 won.

Australian stocks ended slightly higher after the Reserve Bank of Australia paused its tightening cycle following 10 straight rate hikes, saying it wants to see the lag effects of prior rate increase flow through the economy.

The benchmark S&P/ASX 200 Index inched up 0.2 percent to 7,236 while the broader All Ordinaries Index settled 0.2 percent higher at 7,431.50.

Europe

European stocks are broadly higher on Tuesday despite concerns about rising oil prices and the likely impact on inflation and growth.

Investors cheered the results of an ECB survey showing that consumer expectations for euro-area inflation fell for a second month.

Medium inflation expectations for the next 12 months fell from 4.9 percent in January to 4.6 percent in February.

The euro area’s industrial producer prices decreased 0.5 percent sequentially in February following a 2.8 percent decline in January, Eurostat data showed.

While the German DAX Index has advanced by 0.9 percent, the French CAC 40 Index is up by 0.6 percent and the U.K.’s FTSE 100 Index is up by 0.1 percent.

Tech shares are subdued as bond yields rise on fears of inflation emanating from OPEC+ slashing oil output by 1.16 million barrels per day (bpd).

Swiss bank Credit Suisse has shown a notable move to the upside on eve of its annual general meeting.

Nordex Group has also moved higher after signing a contract with E energija group to supply and install wind turbines for a 106 MW wind project in Lithuania.

Rheinmetall has also climbed after its Materials and Trading division won three new orders for structural parts destined for e-mobility vehicles. The orders are each worth a figure in the double-digit million-euro range.

L’Oreal shares have also risen after the cosmetics group reached a deal with Brazil’s Natura & Co. to acquire its Australian luxury brand Aesop at an enterprise value of $2.53 billion.

Renewi has also jumped. The waste-to-product business expects its fiscal year-end profit to be slightly ahead of market expectations.

Wood products manufacturer Accsys Technologies has also moved notably higher after appointing a new CEO.

Meanwhile, biopharmaceutical firm OKYO Pharma has plunged in London as it announced plans to delist from the London Stock Exchange next month.

U.S. Economic Reports

The Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of February at 10 am ET. Economists expect factory orders to decrease by 0.5 percent in February after slumping by 1.6 percent in January.

Also at 10 am ET, the Labor Department is due to release its report on job openings in the month of February. Job openings are expected to decline to 10.4 million in February from 10.8 million in January.

Cleveland Federal Reserve Bank President Loretta Mester is scheduled to speak before the Money Marketeers of New York University Inc. at 9:45 pm ET.

Stocks In Focus

Shares of Etsy (ETSY) are moving notably higher in pre-market trading after Piper Sandler upgraded its rating on the e-commerce company’s stock to Overweight from Neutral.

Financial services company Prudential (PRU) may also move to the upside after JPMorgan upgraded its rating on the company’s stock to Overweight from Neutral.

Meanwhile, shares of Boeing (BA) may see initial weakness after Northcoast Research downgraded its rating on the aerospace giant’s stock to Sell from Neutral.