Asia stocks are set to open lower on Tuesday after weakness in the technology sector pulled U.S. indexes from all-time highs, with investors following the drumbeat of corporate earnings. The dollar fell.
Futures pointed lower in Japan, Australia and Hong Kong. U.S. contracts were little changed in early Asia trading. The tech-heavy Nasdaq 100 Index underperformed in the U.S. session, while the S&P 500 Index posted its biggest drop in almost four weeks. Tesla Inc. led the decline after concerns about a fatal crash of one of its electric vehicles, which appeared to have no driver.
Treasury yields edged back up to around 1.6%. Copper prices surged to a seven-week high on expectations of strengthening demand and a pickup in inflation as economies rebound.
Investors are awaiting further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace. The bright spot in the latest reports was the first revenue gain for International Business Machines Corp. in eleven quarters. Even with this latest pullback in major indexes, and the latest grim news on the spread of Covid-19, global stocks are trading near record highs.
“With a deluge of earnings activity this week from across industries, we may be in a bit of a holding pattern until investors digest any beats or misses on that front,” said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “Bottom line is that short-term volatility is typical when we’re knocking around market highs as traders look to uncover value.”
Here are some key events to watch this week:
- Apple’s first product unveiling of the year on Tuesday.
- Reserve Bank of Australia releases minutes of its policy meeting on Tuesday.
- EIA crude oil inventory report on Wednesday.
- European Central Bank rate decision and President Christine Lagarde briefing on Thursday.
- U.S. releases new home sales data
These are some of the main moves in markets:
- S&P 500 futures rose less than 0.1% as of 7:24 a.m. in Tokyo. The S&P 500 fell 0.5%. The Nasdaq 100 fell 1%
- Nikkei 225 futures fell 1.3%
- Australia’s S&P/ASX 200 Index futures lost 0.5%
- Hong Kong’s Hang Seng Index futures retreated 0.5%
- The yen traded at 108.16 per dollar after falling 0.6%
- The offshore yuan was at 6.5097 per dollar
- The Bloomberg Dollar Spot Index fell 0.4%
- The euro was at $1.2037
- The British pound was at $1.3986 after gaining 1.1%
- The yield on 10-year Treasuries advanced 2 basis points to 1.60%
- West Texas Intermediate crude rose 0.1% to $63.47 a barrel
- Gold was at $1,770.75 an ounce
— With assistance by Vildana Hajric, and Kamaron Leach