S&P 500 futures dip as Samsung warning damps know-how shares

What’s driving markets

Some shine was coming off the tech sector commerce early Tuesday after South Korea’s Samsung Electronics
005930,
-2.35%
stated its fourth-quarter working revenue might fall 35% as weak client demand for smartphones hits gross sales of reminiscence chips.

The news seemed like reducing brief Wall Street’s newest rally.

After a a number of mushy days to start 2024, the S&P 500 bounced 1.4% and the Nasdaq Composite surged 2.2% on Monday, with huge know-how shares reminiscent of Apple
AAPL,
+2.42%,
up 2.4%, and Nvidia
NVDA,
+6.43%
leaping 6.4% main the cost.

Helping reignite the rally was a short dip again under 4% for the 10-year Treasury yield as buyers welcomed news that U.S. customers’ one-year inflation expectations had been at their lowest since January 2021.

Investors additionally welcomed the sight of U.S. WTI crude oil falling again in direction of the $70 a barrel degree, hoping the retreat will ease inflationary pressures.

“Falling Treasury yields tempted investors to buy technology shares on the dip,” stated Richard Hunter, head of markets at Interactive Investor.

“The likes of Alphabet
GOOG,
+2.29%,
Amazon
AMZN,
+2.66%
and Microsoft
MSFT,
+1.89%
additionally noticed renewed shopping for curiosity amid the continuing debate surrounding the timing and ranges of rate of interest cuts, that are anticipated to kick in later this yr ought to inflation lastly be tamed.” Hunter added.

A key replace on inflation will come on Thursday, when the buyer worth index for December will likely be launched. The market is pricing in a 57% probability that the Federal Reserve will begin reducing rates of interest at its March coverage assembly.

Investors have some Fed converse to think about Tuesday. Michael Barr, the central financial institution’s vice chair for supervision, will participate in a dialogue at midday.

Meanwhile, earnings season kicks off on Friday with quarterly outcomes from the massive banks.

Though a number of the larger information factors are coming on the finish of the week, buyers nonetheless have information Tuesday to think about. The commerce deficit narrowed 2% to  $63.2 billion in November. The deficit is shaping as much as be the smallest in three years.

Companies in focus

•  Juniper Networks Inc.
  JNPR,
  +1.04%
   shares are 23% greater within the premarket Tuesday after a report that Hewlett Packard Enterprise Co. is in superior talks to purchase the enterprise, which has a communications networking enterprise and a synthetic intelligence enterprise referred to as Mist AI.
• Netflix Inc.
  NFLX,
  +2.31%
  shares are off 1.7% forward of the bell following a downgrade to impartial from purchase, in line with Citi analysts. The streaming large nonetheless stored its $500 worth goal.