Tuesday August 4th


Dow futures fall 100 points after Monday’s tech-powered rally

U.S. stock index futures dipped on Tuesday as Wall Street was set to give back some of the sharp gains from the previous session. Dow Jones Industrial Average futures traded 107 points lower, or 0.4%. S&P 500 and Nasdaq 100 futures slipped 0.5% each. Tuesday’s slight declines come as lawmakers struggle to make inroads on a new coronavirus stimulus package. House Speaker Nancy Pelosi said she, Senate Minority Leader Chuck Schumer and White House chief of staff Mark Meadows held “productive” discussions on Monday, but added there are several issues still outstanding. “We are moving down the track,” Pelosi said, but “still have our differences.” Both sides have indicated they agree on another $1,200 stimulus check, but remain deadlocked on additional unemployment assistance. Wall Street was coming off a strong session, with the Dow rallying more than 200 points on Monday. The S&P 500 also ended the session less than 3% below the intraday record set on Feb. 19. Those gains came after Microsoft and Apple powered the S&P 500 tech sector to an all-time high, rising 5.6% and 2.5%, respectively. Tech has been by far the best-performing sector this year, rising more than 23% in that time period. “Tech stocks have captured considerable attention for their gaudy, relative total return performance, but what is less appreciated is how ‘consistent’ they have been,” Jim Paulsen, chief investment strategist at The Leuthold Group, in a note to clients. Paulsen pointed out the S&P 500 has outpaced the broader market 57% of the time in 2020. “What valuation is warranted by a sector whose business grows faster for reasons that are less dependent on overall economic conditions, and whose members generate remarkable excess returns with superior frequency, compared to any other sector in the stock market?” Stocks in Asia Pacific mostly rose on Tuesday as the Reserve Bank of Australia’s (RBA) kept its policy settings unchanged. The Hang Seng index in Hong Kong surged 2% on the day to 24,946.63. Japanese stocks, which led gains among the region’s major markets on Monday, continued to see robust gains on Tuesday. The Nikkei 225 gained 1.7% to close at 22,573.66 while the Topix index advanced 2.14% to end its trading day at 1,555.26. South Korea’s Kospi gained 1.29% to close at 2,279.97. Mainland Chinese stocks were mixed on the day, with Shanghai composite gaining 0.11% to about 3,371.69 while the Shenzhen component dipped 0.745% to around 13,860.46. Oil prices eased on Tuesday amid concerns that a fresh wave of COVID-19 infections will see a global demand recovery stalling due to tighter lockdowns, just as major producers ramp up output. U.S. West Texas Intermediate crude futures were down 68 cents, or 1.7%, at $40.33 a barrel, while Brent crude futures were 72 cents, or 1.7%, lower at $43.43 a barrel. Gold was little changed on Tuesday, hovering below the previous session’s record peak as fears over the pace of economic recovery amid surging coronavirus cases were offset by upbeat U.S. manufacturing data. Spot gold was down 0.1% at $1,975.57 per ounce, about $9 shy of the all-time high hit in the previous session. U.S. gold futures rose 0.4% to $1,994.20.