U.S. stock index futures were little changed early Tuesday as traders awaited key economic data later in the week.
On Monday, the Dow Jones Industrial Average DJIA fell 62 points, or 0.16%, to 39069, the S&P 500 SPX fell 19 points, or 0.38%, to 5070 and the Nasdaq Composite COMP fell 21 points, or 0.13% 15976 .
What drives the markets?
Index futures are moving thinly, with hesitant trading extending into the second day of a rally that has seen the S&P 500 rise 11.4% in the last three months alone.
“US markets took a breather after enjoying a strong rally driven by a largely successful earnings season and renewed excitement about the potential of AI, which has seen major indices hover around record highs,” said Richard Hunter, head of markets at Interactive Investor.
The cautious tone also comes as investors are watching for economic data in the coming sessions that could clarify the timing of the Federal Reserve's rate cuts.
“The ongoing interest rate debate continues into the new week without any significant resolution or change,” said Stephen Innes, managing partner at SPI Asset Management.
“Monday brought little color as market participants observed a familiar picture, traders and investors braced for a busy data calendar and the Fed's preferred pricing measure (PCE) update attracted strong interest,” Innes added.
The PCE, or personal consumption expenditure price index, will be released before the market opens on Thursday, and any significant increase in the indicator could finally end any lingering hopes of a Fed rate cut in May.
The rest of the week will also be full of comments from Fed officials, although on Tuesday only Michael Barr, Fed vice chairman for supervision, will speak at 9:05 a.m
The market has responded in recent weeks to a concerted effort by Fed officials to challenge the idea that rate cuts may have begun next month. Her campaign has helped boost the 10-year Treasury yield from about 3.8% to the current 4.26%.
U.S. economic updates scheduled for release Tuesday include durable goods orders for January at 8:30 a.m. Eastern time, the S&P Case-Shiller home price index for December at 9 a.m. and consumer confidence for February at 10 a.m
Monetary policy aside, investors continue to react to corporate news, with recent earnings reports being mixed. Tuesday's sentiment could be bolstered by a 10% rise in shares of Zoom Video Communications
ZM
after the video conferencing company delivered well-received results late Monday.
However shares in Unity Software
U
plunged 20% after the app monetization group's earnings and forecasts fell short of expectations.
Among the companies reporting results on Tuesday is AutoZone
AZO
,
Lowes
LOW
and Cracker Barrel
LOW
before the opening bell, followed by Devon Energy after the close
DVN
,
First solar
FSLR
and cava
CAVA
.
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