Profit Taking May Contribute To Initial Pullback On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a slightly lower open on Tuesday, with stocks likely to give back ground following the rally seen in the previous session.

Profit taking may contribute to initial weakness on Wall Street after the strong upward move seen on Monday, which lifted the Dow to a new record closing high.

A continued increase by the price of crude oil may also generate some negative sentiment, as U.S. crude oil futures climb by 0.6 percent after surging by 2.2 percent on Monday.

The extended rebound by crude oil prices comes amid conflicting messages about a new round of talks between the U.S. and Iran.

While President Donald Trump claimed a meeting is set to be held in Qatar today, a spokesperson for Iran's Foreign Ministry reportedly denied that talks were scheduled.

However, traders may be reluctant to make significant moves ahead of the release of some key U.S. economic data in the coming days, including the closely watched monthly jobs report.

After seeing significant volatility early in the session, stocks moved sharply higher over the course of the trading day on Monday. The major averages all moved to the upside, with the Dow reaching a new record closing high above 52,000.

The Dow gave back some ground late in the day, but the Nasdaq and S&P 500 closed near their session highs. The Nasdaq surged 522.53 points or 2.1 percent to 25,820.14, the S&P 500 jumped 86.41 points or 1.2 percent to 7,440.43 and the Dow climbed 306.63 points or 0.6 percent to 52,182.74.

Technology stocks helped lead the rally on Wall Street, with tech-heavy Nasdaq rebounding strongly after plunging by 4.6 percent last week.

The strength in the sector came as shares of Alphabet (GOOGL) spiked by 4.8 percent following the Google parent's inclusion in the Dow Jones Industrial Average.

Within the tech sector, semiconductor stocks turned in some of the best performances, driving the Philadelphia Semiconductor Index up by 3.8 percent.

Substantial strength was also visible among networking and computer hardware stocks, with the NYSE Arca Networking Index surging by 3.7 percent and the NYSE Arca Computer Hardware Index jumping by 2.4 percent.

Outside of the tech sector, brokerage stocks showed a significant move to the downside, dragging the NYSE Arca Broker/Dealer Index down by 2.2 percent. Notable weakness among steel, airline and gold stocks also partly offset the rally by tech stocks.

Traders also kept an eye on developments in the Middle East, with the U.S. and Iran reportedly agreeing to once again pause hostilities following an exchange of strikes over the weekend.

President Donald Trump claimed in a post on Truth Social this morning that Iran has requested a meeting, with the talks set to take place in Doha, Qatar.

Commodity, Currency Markets

Crude oil futures are climbing $0.43 to $71.18 a barrel after jumping $1.52 to $70.75 a barrel on Monday. Meanwhile, after tumbling $57.40 to $4,038.90 ounce in the previous session, gold futures are slipping $8.80 to $4,030.10 an ounce.

On the currency front, the U.S. dollar is trading at 162.40 yen compared to the 161.94 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1395 compared to yesterday's $1.1420.

Asia

Asian stocks rose broadly on Tuesday as investors watched for a possible resumption of U.S.-Iran talks in Qatar to resolve differences over the Strait of Hormuz and asset releases.

However, Iran's foreign ministry spokesperson Esmaeil Baghaei said U.S. officials' trip to Doha had nothing to do with the Iranian delegation visiting the city and that no talks between the two sides were scheduled.

"Over the coming days, we will not have any negotiation meetings with the U.S. side at any level," he added.

The dollar index climbed above 101 in Asian trading after a slight pullback below the levels in the previous session.

Gold was marginally higher at $4,020 an ounce after dropping to $3,943 an ounce earlier on Fed rate hike jitters. Brent crude futures fell toward $73 a barrel, paring gains from the previous session.

China's Shanghai Composite Index rose 0.5 percent to 4,094.40 after data showed China's official manufacturing PMI returned to expansion in June and non-manufacturing activity expanded for a second month.

Hong Kong's Hang Seng Index dropped 0.6 percent to 22,881.02 despite continued policy support from Beijing after China's central bank significantly boosted liquidity via its overnight reverse repo operations.

Japanese markets climbed as the yen extended losses to trade past 162 per dollar on expectations for a slow pace of interest-rate increases by the Bank of Japan compared with growing expectations of a rate hike by the Federal Reserve.

The Nikkei 225 Index jumped 0.9 percent to 70,062.32, powered by a rebound in technology shares and electronic component manufacturers such as Screen Holdings, SoftBank, Advantest, Tokyo Electron and Taiyo Yuden. The broader Topix Index settled 0.3 percent higher at 3,994.76.

Japan's industrial output in May rose 0.5 percent from the previous month, government data showed earlier in the day. The jobless rate held steady at 2.5 percent in the month, while housing starts rebounded more than estimated, separate reports revealed.

Seoul stocks reversed early losses to end sharply higher, driven by gains in the tech sector, with Samsung Electronics and SK Square both surging over 3 percent. The Kospi Index closed 1 percent higher at 8,476.48.

Investors digested mixed economic readings, with South Korea's retail sales increasing 0.1 percent month-on-month in May after a downwardly revised 3.5 percent drop in the previous month, while industrial output decreased for a second consecutive month on the back of a decline in chip production, separate reports showed.

Australian markets ended lower, with gold stocks suffering heavy losses as bullion prices fell to an eight-month low below $4,000 an ounce.

Rate hike concerns also weighed on markets after the Reserve Bank of Australia's June 15-16 meeting minutes underscored persistent concern that inflation remains well above target.

The benchmark S&P/ASX 200 Index fell 0.5 percent to 8,778.70, while the broader All Ordinaries Index ended down 0.5 percent at 8,986.20.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index climbed 0.6 percent to 13,621.66 after a survey showed New Zealand business confidence surged in June while inflation expectations eased, raising optimism about the near-term economic outlook.

Europe

European stocks have moved mostly higher on Tuesday as technology stocks rebound amid renewed optimism surrounding AI.

With oil prices moving back to pre-war levels, markets remain hopeful that the European Central Bank (ECB) will not raise interest rates in the near term.

ECB Chief Economist Philip Lane said in Sintra, Portugal, today that the second-round effect from higher energy prices is probably going to take some time to show up and that policymakers won't lock themselves into a path for interest rates in the meantime.

Oil prices traded lower and headed for a second month of declines despite clear divergences emerging in statements from both sides regarding whether the U.S. and Iran would hold talks in Qatar today.

While the German DAX Index is up by 1.3 percent, the U.K.'s FTSE 100 Index is up by 0.8 percent and the French CAC 40 Index is up by 0.2 percent.

The British pound edged lower against the dollar, giving away earlier gains after revised data from the Office for National Statistics confirmed that the U.K. economy expanded as initially estimated in the first quarter, primarily driven by services activity.

Gross domestic product grew 0.6 percent sequentially in the first quarter, following a revised 0.1 percent expansion seen in the fourth quarter.

Technology stocks like Infineon, STMicroelectronics and ASML Holding have moved sharply higher.

French drugmaker Sanofi was little changed after announcing its Nexviazyme met all primary and secondary endpoints in a Phase III study in the infantile form of Pompe disease.

British travel and insurance company Saga has plunged after saying trading remained "in line with expectations" in the first four months of the year.

Supermarket chain J Sainsbury has shown a strong move to the upside after keeping its full-year profit outlook unchanged.

International Workplace Group has surged. The flexible workspace company announced a $50 million increase to its 2026 share buyback program.

U.S. Economic News

Standard & Poor's is scheduled to release its report on home prices in major metropolitan areas in the month of April at 9 am ET.

At 9:45 am ET, MNI Indicators is due to release its report on Chicago-area manufacturing activity in the month of June. The Chicago business barometer is expected to slump to 55.4 in June after soaring to 62.7 in May, although a reading above 50 would still indicate growth.

The Labor Department is scheduled to release its report on job openings in the month of May at 10 am ET. Job openings are expected to decrease to 7.298 million in May from 7.618 million in April.

Also at 10 am ET, the Conference Board is due to release its report on consumer sentiment in the month of June. The consumer confidence index is expected to rise to 94.8 in June after slipping to 93.1 in May.