Market Snapshot: Stock futures trim gains after Trump fires Secretary of State Tillerson

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U.S. stock futures trimmed gains but were still pointing to a higher open on Tuesday, after President Trump said he would replace Secretary of State Rex Tillerson with CIA Director Mike Pompeo.

Futures jumped minutes earlier following consumer inflation data that was in line with expectations, soothing concerns that rising prices would hasten interest-rate hikes by the Federal Reserve.

What are the main benchmarks doing?

Dow futures YMM8, +0.32%  rose 83 points, or 0.3%, to 25,291, while S&P 500 futures ESM8, +0.38%  inched up 10 points, or 0.4%, to 2,794. Nasdaq-100 futures NQM8, +0.38% rose 26 points, or 0.4%, to 7,167.

Industrials drove losses for two major indexes on Monday, with the Dow Jones Industrial Average DJIA, -0.62% falling 0.6% to 25,178.61, and the S&P 500 index SPX, -0.13% slipping 0.1% to 2,783.02. Bucking the weaker trend, the Nasdaq Composite Index COMP, +0.36% closed up 0.4%, to 7,588.32, marking its second record close in succession.

Opinion: Here’s the No. 1 tech stock, according to money flows

What could drive markets?

The consumer-price index rose a mild 0.2% in February after a worrisome 0.5% increase in the first month of the year. The cost of housing rose and the price of clothes and auto insurance posted surprisingly large gains for the second month in a row.

Economists surveyed by MarketWatch had forecast a 0.2% advance.

The increase in the CPI over the past 12 months edged up to 2.2% from 2.1%.

A stronger-than-expected inflation number was feared as a potential catalyst to nudge the central bank closer to four hikes instead of the three that the Federal Reserve is expected to carry out, something that could weigh on stocks. The Fed is expected to increase interest rates in March, but the jury out on how aggressively it will act beyond that.

Equities rallied late last week after wage growth came in lower-than-expected, but tipping into correction territory in early February after wages spiked.

Read: What to watch in the CPI report

And: The overheating economy could crash in 2019, this top forecaster says

What are strategists saying?

“While investors appear to be coming to terms with the idea of more rate hikes, some caution remains, especially as this has also come at a time when Donald Trump is threatening a trade war with countries that don’t improve the terms of trade for the U.S.,” said Craig Erlam, senior market analyst at OANDA, in a note to clients.

Which stocks are active?

Shares of Qualcomm Inc. QCOM, -0.35%  fell 5% in thin, premarket trade after Trump on Monday blocked Broadcom Ltd’s AVGO, +3.57%  $117 billion hostile bid for the semiconductor group, citing national security concerns.

Read: How Broadcom vs. Qualcomm went from hostile takeover bid to a Trump blockage

Plus: Semiconductor stocks are hitting new highs again, yet they’re still cheap

DSW Inc. DSW, +2.73% shares fell around 5% in premarket after the footwear retailer posted quarterly results.

Stitch Fix Inc. SFIX, +6.87%  could be active after the online clothing retailer beat Wall Street’s forecasts for sales, but missed on revenue. In addition, nearly 38 million new shares of the company became eligible for trading after Monday’s close.

Shares of Dick’s Sporting Goods Inc. DKS, +2.01%  sank 6.3% in premarket trade Tuesday, after the sporting goods retailer beat fiscal fourth-quarter profit expectations, but missed on sales and provided a downbeat outlook.

What are other markets doing?

European stocks SXXP, -0.16% were edging lower, while Asian markets had a mixed day.

The ICE U.S. Dollar Index DXY, -0.24% was flat after the inflation report, while gold prices GCJ8, +0.50% tipped slightly higher, and oil prices CLJ8, -0.49%  were slumping.

The yield on the 10-year U.S. Treasury TMUBMUSD10Y, -0.85% retreated to 2.840% from 2.867% before the report.