### U.S. Stocks Outlook
Futures for major U.S. indices indicate a relatively flat opening on Tuesday. This follows a mixed performance in the prior session, reflecting a cautious stance among traders who are evaluating recent market gains that have propelled major averages to record highs.
### Market Sentiment
Renewed optimism about potential interest rate cuts by the Federal Reserve has boosted the market. However, recent remarks from Fed officials have reintroduced some uncertainty. According to CME Group's FedWatch Tool, the likelihood of an interest rate cut by September remains high but has declined to 75.3% from nearly 90% the previous week.
### Economic Indicators
Tuesday is expected to be a quiet day on the U.S. economic front, which could see traders taking a wait-and-see approach ahead of the Federal Reserve's monetary policy meeting minutes release on Wednesday. These minutes could offer greater insight into the Fed’s outlook on interest rates.
### Previous Trading Session
Monday saw mixed trading among major U.S. stock indices. The Nasdaq, bolstered by tech stocks, gained 108.91 points or 0.7% to close at 16,794.87, marking a new record high. The S&P 500 edged up 4.86 points or 0.1% to 5,308.13, whereas the Dow Jones Industrial Average fell 196.82 points or 0.5% to 39,806.77.
### Sector Performance
Tech stocks, particularly in the semiconductor sector, performed strongly with the Philadelphia Semiconductor Index advancing 2.2% to a two-month high. Micron Technology surged 3.0% following an upgrade from Morgan Stanley, and Nvidia climbed 2.5% ahead of its fiscal first-quarter results expected on Wednesday.
Gold stocks also showed significant strength, fueled by the precious metal reaching new highs. In contrast, banking and telecom stocks lagged, with JPMorgan Chase falling 4.5% after CEO Jamie Dimon suggested he might retire within five years.
### Trading Activity
Overall, trading volumes were subdued as traders seemed hesitant to make significant moves amid a lack of major U.S. economic data. The week’s economic calendar includes reports on durable goods orders and home sales, which may attract attention alongside the Fed meeting minutes.
### Commodity and Currency Markets
Crude oil futures fell $1.66 to $78.14 per barrel after a slight decline of $0.26 the previous day. Gold futures, after rising $21.10 to $2,438.50 an ounce, fell $7.60 to $2,430.90 an ounce.
### Currency Exchange Rates
The U.S. dollar traded at 156.27 yen, consistent with its value in late New York trading on Monday. Against the euro, the dollar was valued at $1.0856, a slight change from $1.0857.
### Asian Market Performance
Asian stocks ended lower on Tuesday. China's Shanghai Composite Index dropped 0.4% to 3,157.97, affected by cyclical shares. Meanwhile, Hong Kong's Hang Seng Index declined sharply by 2.1% to 19,220.62, led by losses in electric vehicle and technology stocks. Alibaba Group Holding saw a fall of over 1% after announcing further price cuts for its GPT-4 class "Qwen-Long" model from the Tongyi Qianwen series.
In Japan, the Nikkei 225 Index and the broader Topix Index both slid 0.3%, closing at 38,946.93 and 2,759.72, respectively, following earlier gains.
### Conclusion
Overall, the current market environment shows cautious optimism with potential rate cuts by the Federal Reserve, balanced by sector-specific dynamics and global economic factors. Traders are likely to remain focused on forthcoming economic data and Fed communications for further direction.Seoul stocks took a hit as investors remained cautious ahead of the release of the U.S. Federal Reserve's latest monetary policy meeting minutes. The Kospi index dropped by 0.7% to settle at 2,724.18. Key players such as Posco Holdings and LG Chem saw declines of approximately 2% each, but Samsung SDS bucked the trend, surging by 5%.
In Australia, markets ended slightly lower, influenced by hawkish minutes from the Reserve Bank of Australia. The S&P/ASX 200 Index dipped by 0.2% to close at 7,851.70, and the broader All Ordinaries Index also fell by 0.2%, ending at 8,120.20. James Hardie Industries, the leading global manufacturer of fiber cement products, plummeted 14.8% following a downgrade in its fiscal 2025 outlook. Star Entertainment Group fell by 7.4% after Hard Rock International refuted any involvement in a potential takeover bid. Similarly, Sonic Healthcare dropped by 6% after revising its FY24 guidance downward. Over in New Zealand, the S&P NZX-50 Index finished down by 0.5% at 11,675.99.
### Europe
European markets took a downturn on Tuesday, following cautious remarks on inflation and interest rate expectations from Federal Reserve officials. Economic data from the European Central Bank showed a rise in the euro area current account surplus to €36 billion in March, up from €29 billion in February and €13 billion in the same month last year. The goods trade surplus declined slightly to €33 billion from €34 billion, and the services surplus also dropped to €5 billion from €7 billion.
Germany saw a sharper annual decrease of 3.3% in producer prices for April, compared to a 2.9% fall in March, as per Destatis. This exceeded economists' predictions of a 3.2% decline. Monthly producer prices rose by 0.2%, matching both the previous month's growth and economists' expectations. The French CAC 40 Index fell by 1.0%, the German DAX Index decreased by 0.6%, and the UK's FTSE 100 Index dropped by 0.4%.
Eurozone sovereign bond yields ascended for the second consecutive day as investors awaited business activity data expected later this week, seeking indications on the European Central Bank's monetary policy direction. Shares in Italian insurer Generali tumbled after its property and casualty business showed weaker-than-expected first-quarter profitability. Vodafone also saw declines, while it was announced that Stephen van Rooyen would become CEO of VodafoneZiggo from September 2024. On a positive note, energy contractor Saipem surged after securing three new contracts valued at $3.7 billion. AstraZeneca also moved higher, aiming for $80 billion in total revenue by 2030. Greencore shares soared following a share buyback announcement and the company reporting a first-half profit before taxation of £14.7 million, reversing a loss of £6.2 million from the previous year. Kontron rallied after the German IoT technology firm announced a major order for smart wallboxes.
### U.S. Economic Reports
Richmond Federal Reserve President Thomas Barkin is scheduled to deliver opening remarks at the "2024 Investing in Rural America Conference: Building and Maintaining Momentum," hosted by the Richmond Fed at 9 a.m. ET. Federal Reserve Board Governor Christopher Waller will speak on the economic outlook at a Peterson Institute for International Economics event at the same time. New York Federal Reserve President John Williams will provide opening remarks at the 2024 Governance and Culture Reform Conference at 9:05 a.m. ET. At 9:10 a.m. ET, Atlanta Federal Reserve President Raphael Bostic will give "welcome back" remarks at the 2024 Financial Markets Conference. Later, Federal Reserve Vice Chair for Supervision Michael Barr will virtually participate in a "Bank Supervision and Regulation" discussion at the 2024 Director & Executive Regional State Member Bank Conference hosted by the Federal Reserve Bank of Dallas at 11:45 a.m. ET. Bostic is also scheduled to moderate a panel on "Central Banking in the Post-Pandemic Financial System" at 7 p.m. ET.
### Stocks in Focus
Palo Alto Networks (PANW) shares are falling sharply in pre-market trading after the cybersecurity company projected fiscal fourth-quarter revenues and billings on the lower end of analyst expectations. Peloton Interactive (PTON) is also likely to be under pressure following the announcement of a global refinancing plan, which includes issuing $275 million in convertible senior notes due 2029.Macy's (M) shares are anticipated to open strong following the department store's announcement of fiscal fourth-quarter earnings surpassing expectations. Additionally, Macy's has revised its full-year earnings guidance upward.
Similarly, Lowe's (LOW) is expected to see an uptick, as the home improvement retailer's fiscal first-quarter results have outperformed analyst projections across both revenue and profit margins.