Market Snapshot: Dow futures struggle for direction as investors look for inflation clues

What’s driving the market?

Stocks have been stuck in a trading range for several weeks, with the Dow and S&P 500 index trading not far off all-time highs, as investors look for a fresh catalyst and await data on inflation pressures.

The release Thursday of the May consumer-price index is shaping up to be the main data event of the week. A hotter-than-expected read on the April CPI, which rose 4.2% year over year, temporarily rattled markets last month.

“In our view, the fact that underlying inflationary pressures are rising as well raises questions as to whether the spike in headline inflation is due to transitory factors, as the Fed initially supported,” said Charalambos Pissouros, senior market analyst at JFD Group, in a note.

“Now, with several policy makers arguing that they need to start discussing policy normalization at the upcoming gatherings, further acceleration in consumer prices may increase speculation for the committee acting sooner than previously thought, and thereby result in a pullback in equities and other risk-linked assets,” the analyst said.

Treasury yields were slipping Tuesday with the fall in yields is seen as a positive for technology and other growth-related stocks.

U.S. stock futures extended declines early Tuesday after an internet outage took down several major sites, but bounced off session lows after reports tied the outage to a glitch at cloud-computing services provider Fastly Inc.
FSLY,
+7.17%.
Fastly said on its website that it had identified the issue and a “fix is being implemented,” shortly before 7 a.m. Eastern. Fastly shares were down 1.8% in premarket trade.

A closely followed U.S. small-business index fell slightly in May, coming in 0.2 point lower at 99.6, to mark the first decline of the year, according to the National Federation of Independent Business. The fall came as small-business owners said they are losing sales because they can’t find enough people to fill open jobs. And now rising inflation is adding to their worries.

April data released Tuesday morning showed the U.S. international trade deficit narrowed to $68.9 billion from a record $75 billion a month earlier. Economists surveyed by Dow Jones Newswires and The Wall Street Journal had looked for a consensus $69 billion gap.

Data on April job openings will be closely watched amid concerns over difficulties employers are reporting in filling positions. The data is due at 10 a.m., with economists looking for openings to rise to 8.2 million from 8.1 million in March.

Which companies are in focus?

• Online personal styling service Stitch Fix Inc.
  SFIX,
  +4.36%
  said late Monday that it expects revenue to be better than analysts’ forecast in the fiscal year ending July 31. Shares rose more than 11% in premarket trade.

• Marvell Technology Inc.
  MRVL,
  -0.88%
  shares were up 5.6% after the chip maker late Monday reported quarterly results that topped Wall Street expectations and forecast record revenue months after the close of a major acquisition.

• Shares of Southwest Airlines Co.
  LUV,
  -0.46%
  rose after the air carrier provided May metrics and a June outlook that reflected improving leisure passenger traffic and fares.

• Southwest also said it recently entered into an agreement with Boeing Co. 
  BA,
  +1.10%
  to increase its 2022 orders by 34 Boeing 737 MAX 7 planes, bringing the total to 234 firm orders. Boeing shares rose 1.4%.

• Navistar International Corp.
  NAV,
  -0.18%
  said it turned a profit for the fiscal second quarter as it boosted production line rates in all its vehicle assembly plants, though the increase was slower than anticipated because of supply-chain constraints. Navistar shares were up 0.2%.

What are other markets doing?

• The yield on the 10-year Treasury note
  TMUBMUSD10Y,
  1.528%
  fell 5.3 basis points to 1.515%. Yields and bond prices move in opposite directions.

• The ICE U.S. Dollar Index
  DXY,
  +0.16%,
  a measure of the currency against a basket of six major rivals, rose 0.1%.

• Oil futures were lower, with the U.S. benchmark
  CL00,
  -0.52%
  down 0.8%. Gold futures
  GC00,
  -0.26%
  rose, gaining 0.2% to trade above $1,900 an ounce on Comex.

• European equities were higher, with the pan-Continental Stoxx Europe 600
  SXXP,
  +0.39%
  up 0.4% and London’s FTSE 100
  UKX,
  +0.48%
  rising 0.5%.

• In Asia, the Shanghai Composite
  SHCOMP,
  -0.54%
  down 0.5%, while the Hang Seng Index
  HSI,
  -0.02%
  ended less than 0.1% lower in Hong Kong and Japan’s Nikkei 225
  NIK,
  -0.19%
  fell 0.2%.