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U.S. Stock Futures Waver Ahead of Data

By Will Horner 

U.S. stock futures paused Tuesday, putting indexes on course for lackluster trading after the opening bell as investors awaited data on the scale of the trade deficit.

Futures tied to the broad S&P 500 index edged down less than 0.1%. Dow Jones Industrial Average futures ticked 0.2% lower a day after the blue-chip index briefly climbed into record territory before ending the session down 0.4%. Nasdaq-100 futures wavered between gains and losses.

Stocks have been range bound in recent sessions, with indexes hovering close to record levels due to a rapidly rebounding U.S. economy and significant levels of support from Washington and the Federal Reserve. The market's moves in recent weeks have moderated amid inflation concerns. Investors say they are settling in for a period of choppy trading while they await fresh clues on whether a sharp rise in consumer prices will prove to be fleeting.

"There will be constant gut checks from both the bond and the stock markets on whether this is transitory, or is turning into permanently higher inflation," said David Donabedian, chief investment officer at CIBC Private Wealth Management. "I would still put the odds of a higher S&P 500 at the end of the year as better than 50%, but I think there will be more volatility than return to be had in the second half of the year."

In bond markets, the yield on the benchmark 10-year U.S. Treasury note edged down to 1.554%, from 1.570% Monday. Bond yields drop when prices climb. While worries about a sharp and sustained spike in inflation have abated somewhat, money managers are continuing to assess whether it may erode the returns from fixed-income assets.

"You are beginning to see data which suggest that while elevated inflation might be transitory, the time horizon implied by the word 'transitory' is getting longer," Mr. Donabedian said. "If the inflation data is going to persist on the high side for the next six to nine months, then the Fed is going to have to clarify what it means by transitory."

U.S. trade data, due at 8.30 a.m. ET, is expected to show the deficit narrowed in April, but remained elevated after hitting a record in March as stimulus measures pushed demand for imports.

Bitcoin prices continued to fall, hitting their lowest level since late January. The cryptocurrency fell 4.5% from its 5 p.m. ET level Monday to $32,908.05, according to CoinDesk.

Overseas, the pan-continental Stoxx Europe 600 was relatively flat after closing at an all-time high Monday.

Among individual shares, U.K. asset manager Intermediate Capital Group jumped over 4% after reporting a jump in profits and assets under management.

In Asia, stock indexes mostly edged lower by the close of trading. Japan's Nikkei 225 slid 0.2%. In Hong Kong, the Hang Seng Index was relatively unchanged from the prior day. China's Shanghai Composite Index fell 0.5%.

Write to Will Horner at William.Horner@wsj.com

 

(END) Dow Jones Newswires

June 08, 2021 05:10 ET (09:10 GMT)

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