US index futures on Tuesday pointed to a weaker open Resilient stocks avoided a profit-taking sell-off in the previous session. Earnings news bordered on the negative and traders are also looking ahead federal reserve Speeches scheduled for the day, even as they remain concerned about April’s inflation data and the debt ceiling impasse.
Notes from trading on Monday
The major moving averages made a consolidation move on Monday as traders preferred to stay on the sidelines ahead of Wednesday’s inflation data. Some disappointing earnings and a deterioration in sentiment toward regional bank stocks throughout the day also helped keep sentiment subdued.
The S&P 500 Index moved sideways for most of the session, while the tech-heavy Nasdaq Composite Index traded lower in the morning session before picking up for the day. The 30-stock Dow Industrials spent most of the session below the flat line, finishing lower.
Most sectors came under mild selling pressure, while communications services stocks rallied, which helped offset some of the negativity. DISH Network Corp. COURT, Walt Disney Co. DIS, Warner Bros. Discovery, Inc. WBD And Alphabet, Inc. Google GOOD led the advances of the sector.
The performance of the US indices on Wednesday
|Composite Nasdaq Index
|S&P 500 Index
As the debt ceiling impasse persists, investors may do well to be selective in their investment strategy, he said Adam Turnquist, Chief Technical Strategist at LPL Finance.
“Although we view a default as a very low probability event, headline risk could weigh on risk sentiment over the next few weeks,” the analyst said.
“In the event of an ongoing debt ceiling battle, much like 2011, watch for large caps outperforming small caps, growth outperforming value and defensive sectors outperforming more cyclical sectors…