U.S. Stocks May See Early Weakness Following Walmart Warning

After ending yesterday’s trading mixed, stocks are likely to move to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 130 points.

A steep drop by shares of Walmart (WMT) is likely to weigh on the markets, as the retail giant is plunging by 9.3 percent in pre-market trading.

Walmart is under pressure after lowering its guidance for the second quarter and full year primarily due to pricing actions aimed to improve inventory levels.

Auto giant General Motors (GM) may also move to the downside after reporting second quarter earnings that missed analyst estimates.

On the other hand, shares of General Electric (GE) are likely to see initial strength after the conglomerate reported second quarter results that exceeded expectations on both the top and bottom lines.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is widely expected to announce another 75 basis point rate hike as part of its efforts to combat elevated inflation.

U.S. stocks ended on a mixed note on Monday after a choppy session, as investors largely stayed cautious, looking ahead to some key earnings updates, second quarter GDP data and Fed’s monetary policy announcement.

The Dow ended with a gain of 90.75 points or 0.3 percent at 31,990.04 and the S&P 500 settled with a gain of 5.21 points or 0.1 percent at 3,966.84, while the Nasdaq finished with a loss of 51.45 points or 0.4 percent at 11,782.67.

Shortly after the start of trading, the Conference Board is due to release its report on consumer confidence in the month of July. The consumer confidence index is expected to dip to 96.8 in July from 98.7 in June.

The Commerce Department is also scheduled to release its report on new home sales in the month of June. New home sales are expected to tumble by 5.2 percent to an annual rate of 660,000 in June after surging by 10.7 percent to a rate of 696,000 in May.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index edged down by 0.2 percent, while China’s Shanghai Composite Index advanced by 0.8 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.6 percent, the French CAC 40 Index is down by 0.2 percent and the German DAX Index is down by 0.7 percent.

In commodities trading, crude oil futures are jumping $1.87 to $98.57 a barrel after surging $2 to $96.70 a barrel on Monday. Meanwhile, after falling $8.30 to $1,719.10 an ounce in the previous session, gold futures are edging down $2.10 to $1,717 an ounce.

On the currency front, the U.S. dollar is trading at 136.63 yen compared to the 136.69 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0121 compared to yesterday’s $1.0220.

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