Why Nasdaq, S&P 500 Are Set To Open Lower Today – Invesco QQQ Trust, Series 1

Interest-rate concerns seem to be impacting market sentiment as stock futures indicate a slightly lower opening on Tuesday. The Federal Reserve Open Market Committee meeting, spanning two days, commences on Tuesday, with outcomes expected on Wednesday. Earlier today, the Bank of Japan abandoned its longstanding negative interest rate policy, contributing to market jitters ahead of the Fed’s decision. With no major catalysts driving the market, pre-Fed session nerves may keep sentiment subdued.

Cues From Previous Session:

On Monday, a resurgence in tech stocks, fueled by Nvidia Corp.’s (NASDAQ:NVDA) GPU 2024 developer’s conference and potential partnerships involving Apple, Inc. (NASDAQ:AAPL) and Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), bolstered market sentiment.

The major indices opened higher and maintained positive momentum throughout the session, ending the day in positive territory. This reversal snapped a three-session losing streak, although the indices remain below their record highs.

However, small-cap stocks lagged behind, with the Russell 2,000 Index closing lower for the third consecutive session.

Within the S&P sectors, communication services stocks led the gains, while healthcare and real estate sectors experienced modest weakness.

Analyst Color:

Sam Millete, director of fixed income at Commonwealth Financial Network, said “The Fed is going to be taking a lot of the oxygen out of the room this week… It’s going to be a really interesting meeting because markets don’t expect any interest rate changes at this meeting and in fact don’t have any changes priced into the next meeting either.”

The focus will be on how the central bank, especially Chair Jerome Powell, will react to the mixed economic data seen in recent months, the analyst said. “So, with these mixed signals and uncertainty from the Fed, as always, any update directly from the Fed itself is going to be very interesting for markets and has the potential to cause some uncertainty and some volatility,” he added.

Futures Today

Futures Performance On Tuesday ( as of 7 a.m. EDT)

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) slipped 0.36% to $51, and the Invesco QQQ ETF (NASDAQ:QQQ) fell 0.53% to $435.14, according to Benzinga Pro data.

Upcoming Economic Data:

Aside from the kickstart of the FOMC meeting, traders will also have to digest housing market data. The Commerce Department is due to release the housing starts report for February at 8:30 a.m. EDT. Economists, on average, expect housing starts to come in at a seasonally adjusted annual rate of 1.43 million units, up from 1.33 million units in January. Building permits, a measure of future housing activity, may have come in at 1.49 million units, slightly up from 1.47 million units in the previous month.

The Treasury will auction 52-week bills at 11:30 a.m. EDT and 20-year bonds at 1 p.m. EDT.

See Also: Best Futures Brokers

Stocks In Focus:

• Nvidia Corp. (NASDAQ:NVDA) declined moderately in premarket trading, with the decline not as steep as the after-hours down move, as traders react to the GTC 2024 announcements. Peer Advanced Micro Devices, Inc. (NASDAQ:AMD) retreated by over 2%.
• Synopsys, Inc. (NASDAQ:SNPS) added over 2.50% after Nvidia CEO Jensen Huang took the name of the provider of electronic design automation software products at the GTC 2024.
• Coinbase Global, Inc. (NASDAQ:COIN) and Robinhood Markets, Inc. (NASDAQ:HOOD) fell in premarket trading amid the slide in cryptocurrencies.
• Fusion Pharmaceuticals Inc. (NASDAQ:FUSN) shares nearly doubled after the biotech clinched a buyout deal with AstraZeneca plc (NASDAQ:ANZ).

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures traded flattish at $82.16 in early European session after soaring nearly 2% on Monday. Gold futures fell modestly and the yield on the 10-year Treasury bond eased 0.026 points to 4.314%. Bitcoin (CRYPTO: BTC) extended its weakness and plunged over 8% to $62,652.86.

The major Asian markets ended Tuesday’s session mixed, with the Hong Kong, Chinese, Indian and South Korean markets retreating sharply. Japan’s Nikkei 225 average advanced moderately. with the Bank of Japan abandoning its ultra-loose monetary policy. The central bank ended eight years of negative interest rates and raised rates for the first time in 17 years. Meanwhile, the Reserve Bank of Australia stood pat on rates.

European stocks rose modestly in early trading.

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