Wall Street was poised to begin trading higher Tuesday while global stocks were more mixed, as investors look ahead to key U.S. inflation data.
Futures for the Dow Jones Industrial Average pointed up around 60 points, set for a positive open after the index rose 261 points on Monday to close at 34,869. Futures for the S&P 500 and Nasdaq indicated a similarly higher open after Wall Street reversed five consecutive days of losses Monday.
Overseas, the Chinese technology sector remained under pressure from the reported planned breakup of major payments app Alipay by regulators, with the Shanghai Composite down 1.4% and Hong Kong’s Hang Seng Index falling 1.2%. The pan-European Stoxx 600 was just below flat, with Frankfurt’s DAX 0.2% higher and London’s FTSE 100 0.2% lower.
Investor attention is squarely focused on inflation data coming later in the day, when markets will react to the U.S. consumer-price index for August, and core CPI, which excludes food and energy prices. Expectations are for CPI to rise 0.4% in August, down from 0.5% in July, with core CPI holding steady at 0.3%.
Inflation has been central to the narrative of markets in recent months—especially the debate over whether high year-over-year readings are permanent or transitory. Concerns over inflation come as central banks like the Federal Reserve consider slowing, or tapering, their pandemic-era program of monthly asset purchases, which add liquidity to markets.
“With markets back on inflation and tapering watch, the path of least resistance is higher prints from the data,” said Jeffrey Halley, an analyst at broker Oanda. A higher print would mean more-than-expected inflation.
“In that circumstance, I expect the U.S. Dollar to spike, U.S. yields to rise, and equities to probably have a bad day at the office,” Halley added. “But given the lack of momentum anywhere at the moment, I’m not sure it will last.”
In commodity markets, oil prices moved higher as a rally begun last week continued. International benchmark Brent crude futures were 0.75% higher to above $74 a barrel, while futures for the U.S. benchmark, West Texas Intermediate, neared $71 a barrel.
Here are eight stocks on the move Tuesday:
Luxury-goods stocks like LVMH, Burberry, Kering, and Richemont were all lower, as analysts noted concerns over rising Covid-19 cases in Asia. Consumers in China, Japan, and other countries in the region are critical to these companies’ sales and growth. LVMH was down 1.7%, Burberry 2.5%, Kering 3.5%, and Richemont 3%.
Evergrande shares plunged nearly 12% in Hong Kong, as the embattled, highly indebted Chinese property giant further detailed the extent of its financial problems.
Alibaba stock fell 1.5% in Hong Kong, with the U.S.-listed shares poised for similar declines, as analysts noted the Chinese tech sector continues to find itself under pressure driven by regulatory scrutiny. Tencent stock fell1%.
Carlsberg shares moved 2% lower in Copenhagen after investment bank Berenberg double downgraded the stock to “sell.”
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