Following the pullback seen in the previous session, stocks are likely to move back to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 291 points.
Strength in the overseas markets is likely to carry over on Wall Street following the release of upbeat Chinese manufacturing data.
China's manufacturing sector logged its strongest growth in a decade in November to indicate a sustained recovery from the Covid-19 outbreak, survey data from IHS Markit showed.
Continued optimism about a potential coronavirus vaccine may also generate early buying interest, with Pfizer (PFE) and BioNTech (BNTX) applying to the European Medicines Agency for conditional marketing authorization of their vaccine.
Traders are also likely to keep an eye on Federal Reserve Chair Jerome Powell's testimony before the Senate Banking Committee.
In prepared remarks, Powell called the economic outlook "extraordinarily uncertain" and noted it will depend, in large part, on the success of efforts to keep the coronavirus in check.
"The rise in new COVID-19 cases, both here and abroad, is concerning and could prove challenging for the next few months," Powell said. "A full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities."
"Recent news on the vaccine front is very positive for the medium term," he added. "For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups."
Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the manufacturing sector in the month of November.
The ISM's purchasing managers index is expected to dip to 58.0 in November from 59.3 in October, although a reading above 50 would still indicate growth in the manufacturing sector.
Separately, the Commerce Department is due to release its report on construction spending in the month of October. Construction spending is expected to climb by 0.8 percent.
Stocks moved mostly lower during trading on Monday, giving back ground following the strong performance seen last week. The major averages all moved to the downside, with the Dow showing a particularly steep drop.
The major averages climbed off their worst levels of the day but still closed in negative territory. The Dow tumbled 271.73 points or 0.9 percent to 29,639.64, the Nasdaq edged down 7.11 points or 0.1 percent to 12,198.74 and the S&P 500 fell 16.72 points or 0.5 percent to 3,621.63.
In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.3 percent, while China's Shanghai Composite Index spiked by 1.8 percent.
The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has soared by 1.7 percent, the French CAC 40 Index and the German DAX Index are both up by 0.8 percent.
In commodities trading, crude oil futures are falling $0.34 to $45 a barrel after slipping $0.19 to $45.34 a barrel on Monday. Meanwhile, after sliding $7.20 to $1,780.90 an ounce in the previous session, gold futures are jumping $32.60 to $1,813.50 an ounce.
On the currency front, the U.S. dollar is trading at 104.35 yen compared to the 104.31 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1975 compared to yesterday's $1.1963.
For comments and feedback contact: editorial@rttnews.com
