Global stocks traded mixed Tuesday, with investors pricing economic weakness and trade uncertainty into markets in Europe and Asia while betting on near-term support for U.S. benchmarks from an interest rate cut by the Federal Reserve.
U.S. equity futures, in fact, traded notably higher following comments from St. Louis Fed President James Bullard yesterday that noted a "darkened" narrative on global trade that could mean a U.S. economy "that is expected to grow more slowly going forward, with some risk that the slowdown could be sharper than expected due to ongoing global trade regime uncertainty."
Bullard said that a "downward policy rate adjustment may be warranted soon" as a result, triggering a late-session rally that bumped the Dow Jones Industrial Average into positive territory and pushed U.S. Treasury bond yield back to multi-month and multi-year lows.
With Fed Chairman Jerome Powell set to speak this morning in Chicago, CME Group futures prices continue to suggest at least a 50/50 chance of a July rate cut, with two more easing moves priced in between now and the end of the year.
China's Commerce Ministry also said trade differences between the world's two biggest economies should be resolved through dialogue, comments that suggested a softening of the country's more bellicose stance from last week.
That's helped lift U.S. equity futures into positive territory Tuesday, with contracts tied to the Dow indicating a 220 point gain and those linked to the S&P 500 suggesting a 23.6 bump for the broader benchmark.
The Nasdaq Composite, which slipped into correction territory yesterday when it closed 10% from its May 3 peak, may recover Tuesday, with futures suggesting a 65 point gain as investors worry that multiple media reports indicating in-depth antitrust probes into tech giants such as Apple (AAPL - Get Report) , Facebook (FB - Get Report) , Alphabet (GOOGL - Get Report) and Amazon (AMZN - Get Report) will hold back gains.
Apple WWDC 2019: 4 Big TakeawaysTiffany & Co. (TIF - Get Report) posted stronger-than-expected first-quarter earnings Tuesday, but same-store sales fell sharply amid a "dramatic" decline in foreign tourist spending, pulling shares sharply lower in pre-market trading as it cut its full-year profit forecast.
Uber Technologies (UBER) shares active in pre-market trading as investors reacted to what is expected to be a series of analysts' recommendations for the ride-sharing group following its $82 billion listing on the New York Stock Exchange last month.
Uber shares were marked 2.55% higher to indicate an opening bell price of $42.27 each, a move that would leave the stock 27 cents north of it opening trade when the stock listed on the NYSE on May 10.
Cramer Live Replay: Jim Cramer's Thoughts on Uber, Salesforce, FAANG and the FedWatch: A Look at the History of Ride-Hailing AppsU.S. markets were also boosted by reports that Senate Republicans might be ready to push back on President Donald Trump's decision to use tariffs on imports from Mexico to press the government of Andr?(C)s Manuel L??pez Obrador into a more immediate response to the two countries' immigration crisis.
Bloomberg report that Senate Republicans may seek to block Trump
s tariffs. That would be huge for a market under siege and could explain why the Dow finished up yesterday
Globally, stocks continue to trade amid the swirling uncertainty of U.S.-lead trade disputes with China, Japan, Mexico and the European Union, all of which have triggered pronounced slowdowns in manufacturing and investment growth and raised concerns of a world wide recession.
European stocks opened weaker again Tuesday, with benchmarks around the region slipping lower, but as the single currency retreated ahead of a Thursday meeting of the European Central Bank that could provide signals of further monetary easing from President Mario Draghi over his final months at the helm of a seven-year term, the Stoxx 600 gained 0.1% by mid-morning.
Asia stocks were softer, with the region-side MSCI ex-Japan index falling 0.37% into the final hours of trading and Japan's Nikkei 225 closing 0.01% lower as the yen rallied to 107.90 against the U.S. dollar in safe-haven trading.
Away from equities, benchmark 10-year U.S. Treasury bond yields held at a 17-month low of 2.09% in overnight trading, before easing to 2.12%, while 2-year notes were seen at 1.92%, as fixed income markets reacted to Bullard's comments on interest rates as well as ISM manufacturing data that showed activity falling to a two-and-a-half year low last month.
The #USD drops as investors anticipate multiple rate cuts from the #FederalReserve pic.twitter.com/WSxvl2G6Sm
- jeroen blokland (@jsblokland) June 4, 2019Global oil prices were also muted, thanks in part to investor bets that trade uncertainty would lead to lower demand from the world's biggest economies, although prices were supported somewhat by comments from Saudi Energy Minister Khalid al-Falih that suggested OPEC members were prepared to extend their agreed production cuts, which are taking 1.2 million barrels from the market each day, into the second half of the year.
Brent crude contracts for August delivery, the new global benchmark, were seen 67 cents lower from from their Monday close in New York and changing hands at $60.61 per barrel while WTI contracts for the July were marked 43 cents lower at $52.82 per barrel.