US Stocks Set To Open Higher Today On Strong Momentum: Analyst Says Next Fed Rate Decision Could Be ‘Near-Tossup’

ZINGER KEY POINTS

• Tech stocks, which fueled the market recovery at the start of the year, look jaded and have seen a slowdown in market.
• On a positive note, the broader market has prevailed despite the banking crisis and continued uncertainty regarding Fed rates.

Trading in the index futures suggests stocks may get off to a modestly positive start on Tuesday after an upbeat close in the previous session. The recent soft data point to a potential pause by the Federal Reserve and this should encourage traders to stay invested, and the lack of any first-tier economic data could rule out volatility.

Cues From Monday’s Trading:

The major averages closed Monday session on a mixed note, as a rally in energy stocks on the back of rising crude oil prices helped override some of the negative sentiment triggered by macro worries.

The indices opened lower but recovered immediately after. The strength was short-lived and they either trimmed their gains or moved back or forth across the unchanged until late afternoon trading. Buying emerged afterward, helping to cut the losses or move into positive territory.

The Dow Industrials settled at a fresh one-month high and the S&P 500 Index ended at the highest level since Feb. 15.

Among the S&P 500 sector classes, energy stocks closed solidly higher and healthcare stocks also gained ground. On the other hand, consumer discretionary, real estate and utility stocks came under selling pressure.

U.S. Indices’ Performance On Monday

Index	Performance (+/-)		Value
Nasdaq Composite	-0.27%		12,189.45
S&P 500 Index	+0.37%		4,124.51
Dow Industrials	+0.98%		33,601.15

Analyst Color:

Given the mixed economic data, Bill Adams, chief economist at Comerica Bank sees the next Fed rate decision in May could be a “near-tossup.”

“We have a hold lightly penciled into our forecast but another quarter-point hike wouldn’t be a surprise,” he added.

Futures Today

U.S. Futures’ Performance On Tuesday

Index	Performance (+/-)
Nasdaq 100 Futures	+0.37%
S&P 500 Futures	+0.24%
Dow Futures	+0.48%
R2K Futures	+0.48%

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust rose 0.40% to $412.58  and the Invesco QQQ Trust moved up 0.52% to $321.80, according to Benzinga Pro data.

Upcoming Economic Data:

The Bureau of Labor Statistics’ Job Openings and Labor Turnover Summary, or JOLTS, for February is due at 10 a.m. EDT. In January, job openings fell to 10.8 million. Economists, on average, expect a further pullback to 10.40 million in February.

The Commerce Department is due to release its factory orders report for February at 10 a.m. EDT. Factory orders may have fallen 0.5% month-over-month following a 1.6% drop in January.

Fed Governor Lisa Cook and Boston Fed President Eric Rosengren will speak at 1: 30 p.m. EDT.

Stocks In Focus:

• Tesla, Inc. rose over 1% in premarket trading after its 6%+ drop on Monday.
• AMC Entertainment Holdings, Inc. fell over 27% after the movie theater chain said it has reached a settlement agreement concerning a shareholder lawsuit that would allow it to increase the number of authorized shares to 550 million of Class A shares and implement a 1-for-10 reverse stock split. This will facilitate the conversion of AMC Preferred Equity Units into Class A common stock. APE shares rose about 20%.
• Virgin Orbit Holdings, Inc. fell about 23.5% after the company filed for Chapter 11 bankruptcy.

Top Analysts’ Call

• Chevron Corp.: Exane BNP Paribas upgrades from Underperform to Neutral
• CSX Corp.: Morgan Stanley upgrades from Underweight to Equal-Weight with a $27 price target
• Norfolk Southern Corp.: Morgan Stanley upgrades from Underweight to Equal-Weight
• Etsy, Inc.: Piper Sandler upgrades from Neutral to Overweight
• ServiceNow, Inc. NOW-0.06%+ Free Alerts: Baird upgrades from Neutral

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures continued to push higher on Tuesday. After ending Monday’s session up 6.28%, WTI-grade crude oil futures rose 0.86% to $81.11 a barrel in the early European session.

The yield on the benchmark 10-year U.S. Treasury note rose 0.017 percentage points to 3.449% on Tuesday.

Most Asian markets advanced on Tuesday, although the Malaysian and Hong Kong markets bucked the downtrend. The Indian market, meanwhile, was closed for a public holiday. Traders from the region took heart from the resilience shown by Wall Street overnight.

The Australian market recovered after a mid-session slump, drawing encouragement from the Reserve Bank of Australia’s decision to pause after raising the official cash rate either by 50 or 25 basis points since May 2022.

European stocks were seen advancing in late morning trading on Tuesday.

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Originally Posted April 4, 2023 – US Stocks Set To Open Higher Today On Strong Momentum: Analyst Says Next Fed Rate Decision Could Be ‘Near-Tossup’