Futures Pointing To Extended Pullback On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to an extended pullback on Wall Street on Tuesday, with stocks likely to see further downside after ending Monday's volatile session mostly lower.

Ongoing trade uncertainty may continue to weigh on the markets following recent strength, which saw the S&P 500 close higher for nine straight sessions before yesterday's pullback.

While Treasury Secretary Scott Bessent told CNBC on Monday the U.S. is "very close to some deals," the lack of any concrete developments from trade talks has kept investors on edge.

President Donald Trump is scheduled to meet with Canadian Prime Minister Mark Carney for the first time later today amid a tense relationship between the historic allies due to disputes over trade and Canada's sovereignty.

In trade-related economic news, the Commerce Department released a report this morning showing the U.S. trade deficit spiked by much more than expected in the month of March.

Stocks saw considerable volatility over the course of the trading session on Monday before eventually ending the day mostly lower. The major averages recovered from an early slump but once again came under pressure in the latter part of the session.

The major averages ended the day off their early lows but still in negative territory. The Nasdaq slid 133.49 points or 0.7 percent to 17,844.24, the S&P 500 fell 36.29 points or 0.6 percent at 5,650.38 and the Dow dipped 98.60 points or 0.2 percent to 41,218.83.

The early pullback on Wall Street came as some traders looked to cash in on the recent strength in the markets, which lifted the major averages to their best levels in a month.

The S&P 500 closed higher for the ninth consecutive session last Friday, marking its longest winning streak in over twenty years.

Renewed trade concerns also weighed on stocks after President Donald Trump announced plans to impose a 100 percent tariff on movies produced in foreign countries.

"The Movie Industry in America is DYING a very fast death," Trump said in a post on Truth Social. "Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the U.S.A., are being devastated."

"This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda!" he added. "WE WANT MOVIES MADE IN AMERICA, AGAIN!"

Trump also told reporters on Sunday that he has no plans to talk to his Chinese counterpart Xi Jinping this week, offsetting recent optimism about a potential U.S.-China trade deal.

However, early selling pressure waned following the release of a report from the Institute for Supply Management showing an unexpected increase by its reading on U.S. service sector activity in the month of April.

The ISM said its services PMI rose to 51.6 in April from 50.8 in March, with a reading above 50 indicating growth. Economists had expected the index to edge down to 50.6.

The subsequent recovery attempt also came after a report from Bloomberg said India has proposed zero tariffs on steel, auto components and pharmaceuticals up to a certain amount in its trade negotiations with the U.S.

Citing people familiar with the matter, Bloomberg said the offer was made by Indian trade officials visiting Washington late last month to expedite negotiations on a bilateral trade deal.

Energy stocks turned in some of the market's worst performances on the day amid a steep drop by the price of crude oil, with the Philadelphia Oil Service Index plunging by 2.7 percent and the NYSE Arca Oil Index slumping by 1.7 percent.

The price of crude oil tumbled to its lowest closing level in over four years after members of OPEC+ agreed to increase output by another 411,000 barrels per day in June.

Notable weakness also emerged among steel stocks, as reflected by the 1.1 percent loss posted by the NYSE Arca Steel Index.

On the other hand, gold stocks moved sharply higher along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.1 percent.

Airline stocks also turned in a strong performance but closed well off their best levels, with the NYSE Arca Airline Index climbing by 1.2 percent.

Commodity, Currency Markets

Crude oil futures are jumping $1.54 to $58.67 a barrel after tumbling $1.16 to $57.13 a barrel on Monday. Meanwhile, after soaring $79 to $3,322.30 an ounce in the previous session, gold futures are surging $62.30 to $3,384.60 an ounce.

On the currency front, the U.S. dollar is trading at 142.71 yen compared to the 143.37 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1339 compared to yesterday's $1.1315.

Asia

Asian stocks ended mixed in thin holiday trading on Tuesday as investors watched the latest developments in trade negotiations and awaited further policy action from Beijing to boost consumption. Japanese and South Korean markets were closed for public holidays.

The dollar struggled against strong Asian currencies a day after the Taiwanese dollar experienced its most significant surge since 1988.

Holding an emergency press briefing, the country's central bank clarified that the currency's fluctuation was influenced by market speculation surrounding ongoing trade negotiations rather than any official requirement from the U.S.

Gold jumped more than 1 percent to reach a two-week high in Asian trading, while oil prices rose over 2 percent amid signs of rising tensions in the Middle East.

Chinese stocks ended sharply higher as trading resumed after the Labour Day holidays. The benchmark Shanghai Composite Index rallied 1.1 percent to 3,316.11amid signs of Washington and Beijing taking a more conciliatory approach to resolving trade disputes.

Chinese services activity deteriorated more than expected in April to hit a 7-month low, a private survey showed, raising concerns about the state of the economy but fueling speculation over new stimulus measures.

Hong Kong's Hang Seng Index climbed 0.7 percent to 22,662.71, with tech stocks such as Alibaba and Baidu leading the way higher on optimism over Sino-U.S. talks.

Australian markets ended little changed with a negative bias after a choppy session. The S&P/ASX 200 Index ended marginally lower at 8,151.40, extending losses for a second straight session as data showed building approvals fell by 8.8 percent in March.

Gold miners rebounded, with Northern Star Resources surging 3.7 percent and Resolute Mining soaring almost 11 percent as bullion spiked to a two-week high ahead of interest rate decisions from the Federal Reserve and the Bank of England.

Rising U.S. Treasury yields weakened demand for high-yielding Aussie bank stocks, with NAB falling 1.5 percent and Westpac Banking losing 2 percent.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index finished marginally lower at 12,421.09. Skycity Entertainment Group slumped 6.1 percent after the company trimmed its earnings forecast.

Europe

European stocks are broadly lower on Tuesday as investors assess the latest batch of earnings and await upcoming Fed and BoE meetings.

The euro was marginally higher against the dollar as trade negotiations returned to the spotlight.

Elsewhere, Germany's conservative leader has unexpectedly fallen short of the numbers needed to form a majority in parliament to become chancellor.

In economic news, French industrial production growth eased more than expected in March, figures from the statistical office INSEE showed.

Industrial output grew only 0.2 percent in March from February, when production expanded 1.0 percent. Production was expected to climb 0.4 percent.

The German DAX Index is down by 0.7 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down 0.1 percent.

SGL Carbon has plunged. The German carbon and graphite product maker has decided to close its production site in Lavradio, Portugal, as part of the restructuring of its loss-making Carbon Fibers business unit.

Biotech firm Evotec SE has also shown a significant move to the downside after reporting a wider first quarter net loss.

Anglo American has also tumbled after Peabody notified the company that the issues involving the Moranbah North Mine constituted a Material Adverse Change as per the deal terms.

Dutch healthcare technology firm Philips has also slumped. The company slashed its profit margin forecast for 2025, citing the impact from tariffs.

On the other hand, fashion retailer HUGO BOSS AG has moved sharply higher after its first quarter revenue beat estimates.

Car parts maker Continental has also jumped after more than doubling earnings in the first quarter in part from cost-cutting efforts.

Danish wind turbine maker Vestas Wind Systems has also surged after it reported an unexpected operating profit for the first quarter.

British drug major AstraZeneca has also moved to the upside after receiving EU approval for Calquence (acalabrutinib) in combination with bendamustine and rituximab.

U.S. Economic News

The U.S. trade deficit spiked by much more than expected in the month of March, according to a report released by the Commerce Department on Tuesday.

The report said the trade deficit soared to a record high $140.5 billion in March from a revised $123.2 billion in February.

Economists had expected the trade deficit to widen to $129.0 billion from the $122.7 billion originally reported for the previous month.

The much bigger than expected trade deficit came as the value of imports surged by 4.4 percent to $419.0 billion, while the value of exports crept up by 0.2 percent to $278.5 billion.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month's auction of $42 billion worth of ten-year notes.