The major U.S. index futures indicate a nearly unchanged opening on Tuesday, suggesting that stocks may exhibit a lack of clear direction after the robust performance observed in the prior session. Market participants might exhibit caution in executing substantial trades due to prevailing uncertainty regarding the short-term market outlook, particularly following the Dow’s ascent to a record closing high during Monday’s trading session. The subdued activity observed in the U.S. economic landscape could lead to traders adopting a cautious stance as they await the publication of several significant reports in the near term. Market dynamics on Wednesday could be influenced by responses to data concerning private sector employment, job openings, and service sector performance. Nonetheless, the focal point of the week is expected to be the publication of the Labor Department’s highly scrutinized monthly jobs report on Friday.
The data may influence the expectations for interest rates in advance of the Federal Reserve’s forthcoming monetary policy meeting later this month. While the Fed is likely to leave rates unchanged at its January 27-28 meeting, the central bank is widely expected to reduce rates by at least another quarter point in the forthcoming months. Equities experienced a predominantly upward trajectory during Monday’s trading session, recovering losses incurred during the previous week’s holiday-disrupted downturn. The major averages exhibited upward movement, with the Dow achieving a new record closing high. The major averages concluded the day below their session peaks, yet remained solidly in positive territory.
The Dow increased by 594.79 points, reflecting a rise of 1.2 percent, reaching a level of 48,977.18. The Nasdaq saw an advancement of 160.19 points, equating to a 0.7 percent increase, bringing it to 23,395.82. Meanwhile, the S&P 500 experienced a climb of 43.58 points, or 0.6 percent, settling at 6,902.05. The notable upward move by the Dow partly reflected a sharp increase in shares of Chevron, with the energy giant soaring by 5.1 percent. Chevron, a prominent private oil company in Venezuela, experienced a significant increase following a U.S. military intervention that resulted in the apprehension of President Nicolás Maduro.
The price of crude oil experienced a significant increase in response to the news, leading to considerable strength in oil service stocks. Reflecting the strength in the sector, the Philadelphia Oil Service Index surged by 5.5 percent amid optimism regarding potential gains from the reconstruction of Venezuela’s oil infrastructure. Gold stocks exhibited notable strength, driven by a surge in the price of the precious metal, which gained traction as a safe haven in response to heightened geopolitical tensions. Financial, airline, and retail stocks exhibited notable strength, whereas utilities and pharmaceutical stocks experienced a marked decline. On the U.S. economic front, a report released by the Institute for Supply Management indicated that its reading on U.S. manufacturing activity unexpectedly declined in December. The ISM reported that its manufacturing PMI decreased to 47.9 in December, following a decline to 48.2 in November, with a figure below 50 signifying contraction in the sector. The index was anticipated by economists to rise slightly to 48.3.