Tuesday May 1st

2-05-2018

US stocks are set for a weak open as earnings and the Fed meeting take center stage

U.S. stock index futures fluctuated ahead of Tuesday's open, as investors turned their attention to the corporate and central banking space. Around 8:38 a.m. ET, Dow Jones industrial average futures fell 26 points, indicating a lower open of 13.15 points. Nasdaq 100 and S&P 500 futures also indicated a weak start to the session for their respective markets. The moves in premarket trade came as a number of markets overseas in Asia and Europe remained closed for a public holiday. Stocks trading in those regions were relatively flat to higher Tuesday, while in the U.S. bond markets saw yields rise. In today's session, earnings, data and central banking news are expected to take the limelight during trade. Merck, Pfizer, Aetna, and Archer Daniels Midland all reported better-than-expected results before the bell. Apple is among the companies scheduled to report after the close Tuesday. In data, the manufacturing purchasing managers' index (PMI) is scheduled to be released at 9:45 a.m. ET, followed by manufacturing ISM report on business and construction spending at 10 a.m. ET and the Dallas Fed's Texas service sector outlook survey at 10:30 a.m. ET. The Federal Opening Market Committee will begin the first day of its two-day meeting; the group is expected to discuss the current state of the U.S. economy and monetary policy. At the monetary policy event, market participants are not expecting any alterations to interest rates; however, a change in rhetoric could occur. The central bank's decision is due Wednesday. Elsewhere, the White House announced that the May 1 deadline for steel and aluminum tariff exemptions on the European Union, Mexico and Canada had been extended by another 30 days. Markets in Japan traded mostly higher on Tuesday while many Asian markets were shut for a public holiday. The session in Asia followed a decline in U.S. stocks amid a pullback in the telecommunications sector. In Japan, the Nikkei 225 finished up 40.16 points, or 0.18 percent, at 22,508.03, but the Topix index fell 3.05 points, or 0.17 percent, to 1,774.18. Oil prices slid on Tuesday as the dollar remained near a four-month high, but worries that U.S. President Donald Trump will pull out of the Iran nuclear deal underpinned the market. U.S. West Texas Intermediate crude for June delivery was down 77 cents, or 1.1 percent, at $67.80 a barrel by 8:07 a.m. ET (1207 GMT), after settling up 47 cents on Monday. London Brent crude for new July delivery was down 68 cents at $74.01. The June contract expired on Monday, settling up 53 cents at $75.17. Trade was quiet in Asia as many markets including China, India and Singapore were closed for public holidays. Gold slid to a six-week low on Tuesday as the dollar strengthened ahead of a U.S. Federal Reserve policy meeting this week, which is being watched for clues on the future pace of interest rate hikes. The metal also looks vulnerable after breaking through key chart support in the $1,320/1,317 area, its 100-day moving average and a key retracement of its January to March decline, technical analysts said. Spot gold was down 0.6 percent at $1,307.01 an ounce, its weakest since March 20. U.S. gold futures for June delivery were 0.86 percent lower at $1,307.90.