Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Tuesday, with stocks likely to show a lack of direction following the sell-off seen in the previous session.
Stocks look headed for a somewhat flat start on Tuesday, amid mixed cues from Asian and European markets. The mood is likely to be cautious early on in the session, after Monday’s severe setback that saw Dow plunging 1.3 percent to record its biggest single-session loss in nearly a month.
After ending last Friday’s trading mostly higher, stocks showed a substantial move to the downside during trading on Monday. With the drop on the day, the Dow closed lower for the ninth time in ten sessions.
The major averages climbed off their worst levels of the day going into the close but remained firmly negative. The Dow tumbled 328.09 points or 1.3 percent to 24,252.80, the Nasdaq plunged 160.81 points or 2.1 percent to 7,532.01 and the S&P 500 slumped 37.81 points or 1.4 percent to 2,717.07.
Continued concerns about a global trade war contributed to the weakness on Wall Street after a report from the Wall Street Journal said President Donald Trump plans to ban many Chinese companies from investing in U.S. technology firms and block additional technology exports to Beijing.
Trump also continued his harsh rhetoric on trade in a post on Twitter on Sunday, urging countries to remove “artificial” trade barriers and tariffs on U.S. goods.
“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!” Trump tweeted.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a bigger than expected rebound in new home sales in the month of May.
The Commerce Department said new home sales spiked by 6.7 percent to an annual rate of 689,000 in May after plunging by 3.7 percent to a revised rate of 646,000 in April. Economists had expected new home sales to climb by 1.5 percent.
Steel stocks turned in some of the market’s worst performances on the day amid the concerns about the trade dispute between the U.S. and China.
Reflecting the weakness in the steel sector, the NYSE Arca Steel Index plunged by 3.4 percent to its lowest closing level in well over two months.
Semiconductor, energy, and biotechnology stocks also saw considerable weakness, moving lower along with most of the other major sectors.
