Market Snapshot: Dow aims for fresh move past 25,000 as yield and dollar climb pauses

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The Dow industrials was poised to move further atop the 25,000 level on Tuesday, as U.S. bond yields eased and the dollar pulled back, while investor cheer over easing trade tensions between the U.S. and China continued.

What are markets doing?

Dow Jones Industrial Average futures YMM8, +0.23%   rose 50 points, or 0.2%, to 25,052, while those for the S&P 500 index ESM8, +0.20%  rose 24 points, or 0.4%, to 6,939.50. Nasdaq-100 NQM8, +0.39%  gained 24 points, or 0.4%, to 6,939.75.

On Monday, the Dow Jones Industrial Average DJIA, +1.21% soared 298.20 points, or 1.2%, to 25,013.29, for its highest close since March 12. The S&P 500 SPX, +0.74% rose 0.7% to 2,733.01, its best finish since mid March, while the Nasdaq Composite Index COMP, +0.54% rose 0.5% to 7,394.04.

The small-cap benchmark Russell 2000 index RUT, +0.66%  rose 0.7% after scoring its latest in a series of records on Monday.

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What’s driving the market?

The dollar was continuing to retrace gains on Tuesday, while the 10-year U.S. Treasury note yield TMUBMUSD10Y, +0.60%  was hovering around 3.07% after touching a seven-year intraday high of 3.126% on Friday. Higher yields as well as a strong dollar, can make stocks less attractive to investors.

With no economic data or Federal Reserve speakers on the calendar for Tuesday, investors may focus on easing trade tensions between the U.S. and China, which helped rally stocks at the start of the week.

Reports said that China will cut import duties on passenger cars as of July 1 to 15% from the current 25%. Ford Motor Inc. F, +1.59%  rose 1.6% in premarket.

Other geopolitical tensions may hover in the background, with uncertainty over a historic meeting between U.S. President Donald Trump and North Korea’s dictator Kim Jong Un. Vice President Mike Pence warned in an interview late Monday that North Korea cannot ‘play’ President Trump where nuclear disarmament is concerned.

Meanwhile, rising oil prices may stay on investors’ minds, amid worries about the effect they could have on inflation and stock prices. Analysts say global oil prices will remain elevated as long as the market thinks sanctions could be imposed on Venezuela and Iran.

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Laying out new demands for Iran on Monday, the White House said any new nuclear deal with the U.S. would require Iran to stop enriching uranium and to pull its support for militant groups in the Middle East. The demands were met by immediate rejection from Iran.

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What are strategists saying?

“Asian equities didn’t enjoy the same excitement in Wall Street as optimism over easing tensions faded, meaning that Asian investors are likely to become more worried about oil trading at $80. The first response to Nicolás Maduro’s victory in Sunday’s Venezuelan elections was a fresh round of U.S. sanctions,” said Hussein Sayed, Chief Market Strategist at FXTM, in a note to clients.

Given tight market conditions, he added, Brent oil prices are likely to stay around the $80-a-barrel level.

What stocks are in focus?

Toll Brothers Inc. TOL, +1.09%  , Autozone Inc. AZO, +1.91%   Kohl’s Corp. KSS, +2.83%   and TJX Companies Inc. TJX, -0.11%   are among the companies due to report ahead of the open.

Hewlett Packard Enterprises Co. HPE, -0.28% Intuit Inc. INTU, +0.60%  and Red Robin Gourmet Burgers, Inc. RRGB, +0.91%   will report after the close.

Sony Corp. SNE, -0.43% 6758, -1.97%  may be active after the Japanese multinational conglomerate said it has agreed to buy Mubadala Investment Co.’s stake in EMI Music Publishing, in a roughly $2.3 billion deal.

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What are other markets doing?

Asian markets finished mixed, while European stocks SXXP, +0.03% were inching higher.

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Gold futures GCM8, +0.24% inched up 0.3% to $1,294.10 an ounce. The ICE U.S. Dollar Index DXY, -0.39% DXY, -0.39% fell 0.3% to 93.400, as the pound strengthened against the buck GBPUSD, +0.2234%  .

Bank of England policymaker Gertjan Vlieghe reportedly predicted up to two interest-rate increases per year, as officials testified in front of the U.K. Treasury committee.

U.S. oil futures CLM8, +0.37% rose 0.6% to $72.66 a barrel, lifted by growing concerns over global supply given worries Venezuela and Iran could come under new sanctions by the U.S.