U.S. Stocks May Come Under Pressure Amid Renewed Interest Rate Uncertainty

After turning lower over the course of the previous session, stocks may see some further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.5 percent.

Renewed uncertainty about the outlook for interest rates may weigh on the markets as traders digest recent U.S. economic data.

Last Friday’s closely watched inflation data combined with Monday’s stronger than expected manufacturing data have raised questions about whether the Federal Reserve will lower rates in June.

Treasury yields moved sharply higher in reaction to the data on Monday and are seeing further upside this morning, with the yield on the benchmark ten-year note reaching a four-month high.

While CME Group’s FedWatch Tool is currently still indicating 56.8 percent chance the Fed will cut rates by a quarter point in June, that is down from 63.8 percent a week ago.

Not long after the start of trading, the Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of February. Factory orders are expected to increase by 1.0 percent in February after tumbling by 3.6 percent in January.

The Labor Department is also due to release its report on job openings in the month of February. Job openings are expected to dip to 8.74 million in February from 8.86 million in January.

After failing to sustain an early move to the upside, stocks moved mostly lower over the course of the trading day on Monday. The Dow and the S&P 500 gave back ground after ending last Thursday’s trading at record closing highs, while the tech-heavy Nasdaq managed to end the day in positive territory.

While the Nasdaq inched up 17.37 points or 0.1 percent to 16,396.83, the Dow slid 240.52 points or 0.6 percent to 39,566.85 and the S&P 500 dipped 10.58 points or 0.2 percent to 5,243.77.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. China’s Shanghai Composite Index edged down by 0.1 percent, while Japan’s Nikkei 225 Index inched up by 0.1 percent and Hong Kong’s Hang Seng Index surged by 2.4 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index and the German DAX Index are both down by 0.2 percent.

In commodities trading, crude oil futures are surging $1.23 to $84.94 a barrel after climbing $0.54 to $83.71 a barrel on Monday. Meanwhile, after advancing $18.70 to $2,257.10 an ounce in the previous session, gold futures are jumping $19.60 to $2,276.70 an ounce.

On the currency front, the U.S. dollar is trading at 151.64 yen compared to the 151.65 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0745 compared to yesterday’s $1.0743.

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