Lingering uncertainty about the outlook for interest rates added to a cautious tone among market players
US stocks were mixed on Monday, with rallying tech stocks pushing the Nasdaq Composite index to fresh record highs. The tech-heavy benchmark finished 0.7% higher, while the S&P 500 advanced 0.1%. Meanwhile, the Dow Jones slipped 0.5% as investors opted to take some profit after closing above 40,000 for the first time last week. In individual stocks, shares of JPMorgan gave up more than 4% amid report that CEO Jamie Dimon was preparing to retire. Nvidia advanced nearly 2.5% ahead of its quarterly results due on Wednesday.
Following the mixed cues from Wall Street, Asian equities were mostly lower on Tuesday amid some profit-taking after seven days of gains. Lingering uncertainty about the outlook for interest rates added to a cautious tone among regional investors. China’s Shanghai Composite index fell 0.42%, retreating from its highest levels seen this year so far. Hong Kong’s Hang Seng index was the worst performer in Asia on Tuesday, sliding as much as 2.12% from a multi-month high amid losses in EV, tech stocks.
Similarly, European stocks opened lower on Tuesday. The pan-European STOXX 600 slipped 0.3% in early deals and could see its biggest one-day drop in three weeks. On the data front, German producer prices fell more than expected last month mainly due to lower energy prices. Now, investors are gearing up for the release of minutes from the Federal Reserve’s latest meeting on Wednesday. Traders have priced in US rate cuts of 42 basis points by the end of 2024.
Meanwhile, the US dollar failed to challenge the 104.70 local resistance earlier in the day to turn negative eventually. The USD index has settled back around 104.50, deciding on further direction during the European deals. The greenback could receive some support from the Fed this week if the upcoming meeting minutes deliver a hawkish tone on interest rates. Otherwise, the dollar may see deeper losses. On the downside, the immediate support now arrives in the 104.40 area, followed by the 104.00 psychological level.
