U.S. Stocks May Lack Direction Amid Uncertainty About China
Following the sell-off seen in the previous session, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by less than a tenth of a percent.
Lingering uncertainty about the situation in China may lead to choppy trading on Wall Street following widespread protests over the country’s Covid restrictions.
Mainland China reported the first decrease in new Covid infections in more than a week on Monday, generating some positive sentiment.
Chinese health officials also released a plan to boost vaccinations for elderly people and said they are “closely watching” the virus as it evolves and mutates.
The officials defended China’s zero-Covid policy at a press briefing on Tuesday but said lockdowns would be lifted “as quickly as possible.”
However, traders have seen their hopes for an easing of Covid restrictions in China dashed by recent events, leading to some hesitation.
Traders may also be reluctant to make significant moves ahead of the release of some key economic data in the coming days, including the Labor Department’s closely watched monthly jobs report on Friday.
Shortly after the start of trading, the Conference Board is due to release its report on consumer confidence in the month of November. The consumer confidence index is expected to dip to 100.0 in November from 102.5 in October.
Stocks moved sharply lower over the course of the trading session on Monday, largely offsetting the strong upward move seen last week. With the steep drop on the day, the Dow pulled back well off last Friday’s seven-month closing high.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow tumbled 497.57 points or 1.5 percent to 33,849.46, the Nasdaq plunged 176.86 points or 1.6 percent to 11,049.50 and the S&P 500 dove 62.18 points or 1.5 percent to 3,963.94.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. China’s Shanghai Composite Index surged by 2.3 percent and Hong Kong’s Hang Seng Index soared by 5.2 percent, although Japan’s Nikkei 225 Index bucked the uptrend and fell by 0.5 percent.
Most European stocks have also moved to the upside on the day. While the German DAX Index is nearly unchanged, the French CAC 40 Index is up by 0.1 percent and the U.K.’s FTSE 100 Index is up by 0.7 percent.
In commodities trading, crude oil futures are jumping $1.20 to $78.44 a barrel after climbing $0.96 to $77.24 a barrel on Monday. Meanwhile, after falling $13.50 to $1,755.30 an ounce in the previous session, gold futures are rising $11.20 to $1,766.50 an ounce.
On the currency front, the U.S. dollar is trading at 138.38 yen compared to the 138.95 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0360 compared to yesterday’s $1.0340.
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