The stock market is poised to continue its upward trajectory, as major index futures are showing strong gains early on Tuesday. This comes as traders interpret Federal Reserve Chairman Jerome Powell’s recent comments as signaling a potential rate cut later this year. Tech stocks are on the rise, and bond yields are also up slightly.
In premarket trading, the SPDR S&P 500 ETF Trust (SPY) rose 0.23% to $556.53, while the Invesco QQQ ETF (QQQ) gained 0.38% to $499.22. The futures market is anticipating a pause at the July meeting, with a 77% probability of a rate cut in September.
On Monday, stocks experienced some volatility before ultimately closing mostly higher. The Nasdaq Composite and the S&P 500 reached new intraday and closing records, while the Dow Jones Industrial Average closed marginally lower after surrendering its early gains.
Economists are expressing concerns about weak economic data, with some calling for immediate rate cuts by the Federal Reserve. Wharton Professor Jeremy Siegel believes a rate cut at the July meeting is necessary to support growth. Despite concerns about the narrowness of the market rally, fund manager Louis Navellier is optimistic that the stock market will broaden out in the coming months.
Looking ahead, there are several key economic events to watch, including speeches from Fed officials and Treasury Secretary Janet Yellen. Stocks in focus include Intel Corp. (INTC), which saw its shares rise in premarket trading, and BP p.l.c. (BP), which fell after announcing potential impairment charges.
In commodity markets, crude oil futures declined while gold futures rebounded. The 10-year Treasury note yield rose to 4.28%, and Bitcoin slipped slightly. Asian markets are mostly up, while European stocks are lower as traders digest regional election results.
Overall, the market is optimistic about the potential for rate cuts and continued economic growth, but caution remains as key economic data and corporate earnings reports are released.