By Investors Hub
The major US index futures are pointing to a roughly flat on Tuesday following the strength seen in the previous session. Traders may be reluctant to make any significant moves following the upward move on Monday, which lifted the Dow and the S&P 500 to new record closing highs.
Another light day on the U.S. economic front may also keep traders on the sidelines ahead of the release of reports on new and existing home sales and leading economic indicators in the coming days.
Stocks moved mostly higher during trading on Monday following the mixed performance seen last week. With the upward move on the day, the Dow and the S&P 500 both climbed to new record closing highs.
The major averages ended the session just off their best levels of the day. The Dow climbed 144.71 points or 0.7 percent to 21,528.99, the Nasdaq surged up 87.25 points or 1.4 percent to 6,239.01 and the S&P 500 advanced 20.31 points or 0.8 percent to 2,453.46.
The buying interest on Wall Street was partly in reaction to strength in the overseas markets, which benefited from political news out of Europe.
French President Emmanuel Macron’s party won a clear parliamentary majority in Sunday’s election, giving him a strong mandate in parliament to pursue his pro-European Union, business-friendly reform plans.
Additionally, Brexit negotiations with the EU have begun after Britain bowed to pressure for a formal opening to their long-awaited negotiations rather than first holding technical talks between civil servants.
Trading activity was somewhat subdued, however, as a lack of major U.S. economic data kept some traders on the sidelines.
The economic calendar for the week remains relatively quiet, although traders are likely to keep an eye on reports on new and existing home sales and leading economic indicators.
Meanwhile, New York Federal Reserve President William Dudley predicted that inflation would gradually rise as a tight labor market leads to higher wages.
“Inflation is a little lower than what we would like, but we think that if the labor market continues to tighten, wages will gradually pick up and with that, inflation will gradually get back to 2 percent,” Dudley said.
The comments from Dudley came after the Fed’s widely expected to decision to raise interest rates by a quarter point last week.
Biotechnology stocks saw substantial strength on the day, resulting in a 2.2 percent jump by the NYSE Arca Biotechnology Index. With the spike, the index reached its best closing level in well over a year.
Clovis Oncology (CLVS) led the sector higher after the biopharmaceutical company announced positive late-stage trial data for its ovarian cancer drug.
Significant strength was also visible among semiconductor stocks, as reflected by the 1.9 percent advance by the Philadelphia Semiconductor Index. Micron (MU) and Integrated Device Technology (IDTI) posted standout gains.
Airline stocks also showed a notable move to the upside, driving the NYSE Arca Airline Index up by 1.8 percent. The index moved higher after closing lower in six out of the seven previous sessions.
Internet, software, and banking stocks also saw considerable strength on the day, while natural gas stocks bucked the uptrend.
Adedapo Adesanya