The major U.S. index futures indicate a modest decline at the Tuesday open, suggesting that stocks may retrace some of the gains achieved in the preceding two sessions. The futures experienced a slight decline subsequent to the publication of a report by the Commerce Department indicating that retail sales in the U.S. remained unexpectedly stagnant during December. The report indicated that retail sales remained essentially stable in December, following an increase of 0.6 percent in November. Analysts had anticipated an increase in retail sales of 0.4 percent. Retail sales remained largely stable in December, with the exception of a minor decline in sales from motor vehicle and parts dealers, following a 0.4 percent increase in November. Ex-auto sales were projected to increase by 0.3 percent. A separate report indicated that import prices in the U.S. increased in accordance with estimates during the month of December. Equities experienced a predominantly positive trajectory throughout the trading day on Monday, building on the robust gains observed in the previous Friday’s session. While the Dow inched towards a new record closing high, the tech-heavy Nasdaq exhibited a more significant upward movement.
The major averages concluded the day in positive territory. The Dow increased by 20.20 points, representing a marginal rise of less than a tenth of a percent, reaching 50,135.87. Meanwhile, the Nasdaq experienced a notable gain of 207.46 points, equivalent to 0.9 percent, bringing it to 23,238.67. The S&P 500 also saw an uptick, climbing 32.52 points or 0.5 percent to settle at 6,964.82. The robustness observed can be attributed in part to a sustained recovery in technology stocks, which played a significant role in the rally witnessed last Friday. Software giant Oracle experienced a notable increase of 9.6 percent following an upgrade in its stock rating by D.A. Davidson, moving from Neutral to Buy. Nevertheless, market participants appeared hesitant to undertake more substantial actions in anticipation of the forthcoming release of several critical U.S. economic reports. The Labor Department’s monthly jobs report, which garnered significant attention and was postponed due to the recent government shutdown, is expected to take center stage.
The report is anticipated to indicate an increase in employment by 70,000 jobs in January, following a rise of 50,000 jobs in December, with the unemployment rate projected to remain steady at 4.4 percent. Reports on retail sales and consumer price inflation are poised to draw significant attention, given that the data may influence the trajectory of interest rates. “With Jerome Powell nearing the end of his term and Kevin Warsh widely expected to take over as Fed Chair, markets are increasingly sensitive to how data influences rate expectations,” noted Daniela Hathorn. “While leadership changes may affect tone and communication, the data remains the ultimate driver.” She noted that the employment and inflation releases this week will be pivotal in shaping market expectations regarding easing — a scenario that could bolster equities and precious metals — or whether persistent inflation necessitates ongoing restraint.
Gold stocks exhibited notable performance as the price of the precious metal experienced a significant increase, propelling the NYSE Arca Gold Bugs Index upward by 6.1 percent. Notable strength was evident in the networking and software sectors, as the NYSE Arca Networking Index and the Dow Jones U.S. Software Index experienced increases of 4 percent and 3.3 percent, respectively. Brokerage and semiconductor stocks exhibited notable strength during the day, whereas healthcare and airline stocks experienced a decline.