U.S. stocks index futures moved higher this Tuesday, with technology and growth stocks bouncing back from their sell-off the previous day. Investors await key economic data, which could direct the Fed’s monetary tightening path. Tesla Inc (TSLA.O) and Microsoft Corp (MSFT.O) were among some of the stocks leading the gaining momentum.
Oil prices grew on Tuesday as investors shift their focus to demand trends and the effects of higher prices on the global economy. This steep climb in oil prices created new inflation worries, cooling off expectations that the Fed may soon step away from its aggressive policy tightening. Furthermore, a weak U.S. manufacturing sector points to a possible recession, provoking concerns of a banking crisis.
The S&P 500 and the tech-heavy Nasdaq (.IXIC) have gained 7.4% and 16.5%, respectively, in 2023. Energy stocks have led that growth, as investors forecasts oil prices edging towards $100 a barrel. Chevron Corp (CVX.N), Exxon Mobil Corp (XOM.N), and Occidental Petroleum Corp (OXY.N) rose this Tuesday premarket, with an increase from 0.5% to 0.9%.
Traders expect a 25-basis point rate hike in May at 59.1%, with chances for a pause at 40.9%, according to CME Group’s Fedwatch tool. U.S. job openings and factory orders due on Tuesday will likely give further insight into the economic performance, which could extrapolate an idea on the projected interest rate trajectory. Remarks given by Federal Board Governor Lisa Cook, and Cleveland President Loretta Mester, could provide an indication of the prospects of monetary policy changes in the near future.
Tesla Inc (TSLA.O) is an American electric vehicle and clean energy company based in California. Founded in 2003, they design, develop, manufacture, lease, and sell EVs and energy storage solutions. Microsoft Corp (MSFT.O) is an American technology company that focuses on providing software solutions and creating an interconnected platform for computer and mobile device users. Chevron Corp (CVX.N), founded in the early twentieth century, is a major American energy company, primarily operating in the oil industry, with billion-dollar investments in electricity production. Exxon Mobil Corp (XOM.N) and Occidental Petroleum Corp (OXY.N) are two other public American companies that focus on oil production and distribution. Federal Board Governor Lisa Cook is a U.S. economist and professor of economics at Michigan State University with research topics focusing on African-American economics, pension reform, and technology transfers. Cleveland President Loretta Mester is a U.S. economist who has served as the President of the Federal Reserve Bank of Cleveland since 2014.
