The mood on Wall Street has turned uneasy after a Federal Reserve rate cut, and hopes for more down the line have fueled a record run by the market. The futures tied to all the major averages showed a lackluster mood early Tuesday, signaling a potential pause in the rally.
A strategist, however, offered a positive take on the stretched market. “Don’t fear new highs,” said Carson Group Chief Market Strategist Ryan Detrick on X. The chart he shared showed the S&P 500 Index breaking to a new high after a period of consolidation that followed a peak.
LPL Chief Technical Strategist Adam Turnquist said, “Building overbought conditions paired with diverging breadth suggest maybe this melt-up could be due for some cooling off — something we would consider a tactical opportunity to buy the dip.”
As of 2:15 a.m. ET on Tuesday, the Nasdaq 100, S&P 500, and Russell 2000 futures were marginally lower, while the Dow futures ticked up.
Stocks extended their record-making streak to three sessions on Monday as strong performances by IT stocks helped offset the weakness seen in most other S&P 500 sector classes. Nvidia and Apple spearheaded the gains, with the former reacting to the news of its proposed $100 billion investment in artificial intelligence startup OpenAI. The latter benefited from positive commentary from Wall Street firms.
All major averages, except the Russell 2000 Index, hit fresh highs, with the small-cap focused index finishing just shy of its previous peak.
The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) climbed 0.47% and 0.59%, respectively. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Shares Russell 2000 ETF (IWM) gained 0.16% and 0.58%, respectively.
Fed Chair Jerome Powell is scheduled to make a public appearance at 12:35 p.m. ET. Other Fed speakers lined up for the day are Vice Chair for Supervision Michelle Bowman (9 a.m. ET) and Atlanta Fed’s Raphael Bostic (10 a.m. ET).
S&P is set to release its flash manufacturing and services purchasing managers’ indices (PMI) for September, with both readings expected to show a slower pace of expansion than in August.
AutoZone (AZO) and Micron (MU) are among the notable companies reporting their quarterly results on Tuesday.
Crude oil futures extended their losses early Tuesday, but gold continues to shine, hitting a fresh high in the overnight session. The 10-year Treasury note yield continues to hold up above the 4.1% mark. The greenback traded slightly stronger against its major counterparts.
The major Asian markets were mixed on Tuesday, with the Chinese, Hong Kong, and Indian markets losing ground, while most others advanced. Stocks in China and Hong Kong came under pressure after the People’s Bank of China Governor Pan Gongsheng did not hint at any immediate monetary policy changes at a briefing held on Monday.
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