Nasdaq, S&P 500 Futures Dip As Traders Pause For Breather Ahead Of April CPI: Strategist Sees Path To New Highs

U.S. stocks are priming for a pause on Tuesday following the stellar gains notched up in the previous session. Tariff news flow, first-tier economic data, and a few earnings reports could decide the day's trading direction, although the momentum is decisively in favor of further gains.

As of 10:53 p.m. ET, futures tied to the S&P 500, Nasdaq 100, Dow Jones Industrial Average, and Russell 2000 indices were down 0.31%, 0.40%, 0.19%, and 0.51%, respectively.

The WTI-grade crude oil futures slipped modestly in the Asian session on Tuesday after rising over 1.54% and settling just under $62 a barrel in the previous session. Monday's rally came after optimism over the trade deal between the U.S. and China. 

After slipping over 3% on Tuesday, gold futures are up modestly, while the U.S. 10-year Treasury note yield edged down slightly but held above the 4.4% level. 

The Asian markets open for trading were mostly higher on Tuesday, with Japan's Nikkei 225 Index leading the charge. Hong Kong's Hang Seng index, however, traded sharply lower.

Traders in the U.S. will look ahead to the Bureau of Labor Statistics' consumer price index (CPI) report for April. The month-over-month CPI and core CPI rates are expected to rise at an accelerated pace of 0.2% and 0.3%, respectively, while the annual pace will likely remain unchanged from March at 2.4% and 2.8%, respectively.

The National Federation of Independent Business (NFIB) Small Business Optimism Index, also due for the day, is expected to pull back to 95 in April.

On the earnings front, the spotlight will likely be on the reports from JD.com (JD), Tencent Music (TME), Sea Limited (SE), CyberArk (CYBR), Silicon Labs (SLAB), Under Armour (UA), and Oklo (OKLO).

The major averages advanced strongly on Monday, as traders cheered the U.S.-China trade truce. The tech-heavy Nasdaq Composite Index climbed 4.35%, the S&P 500 Index rallied 3.26%, and the Dow jumped 2.81%

The Russel 2000 Index ended 3.42% higher for the day.

All three major averages recorded the biggest one-day gain since April 9 and substantially cut their year-to-date losses. The S&P 500 Index climbed above its 200-day moving average for the first time in more than 30 sessions, positioning it for long-term gains.

The buying was across-the-board, led by consumer discretionary and IT stocks.

Fund manager Louis Navellier sees reasons to be optimistic about the near and long term. He added that he expects businesses to load up on goods during the 90-day postponement window agreed upon by China and the U.S. This will support employment and reduce the tariffs' full impact on inflation.

Navellier expects further announcements of expansion of U.S. manufacturing, which should support business activity and employment.

Carson Group's Ryan Detrick expects new highs for the averages as the NYSE advance/decline ratio is closer to new highs, while the ratio is at a new high for the S&P 500 Index. "Breadth leads price is how I learned it, and these are clues new highs are likely," he added.

On Monday, the Invesco QQQ Trust (QQQ) ETF surged up 4.07% before closing at $507.85. The SPDR S&P 500 ETF (SPY) climbed 3.30% to $582.99, and the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 2.86%  to $424.23.

The iShares Russell 2000 ETF (IWM) rallied 3.52% to $207.87.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: Trump Tariffs Result In $16B Windfall For April, Rates Still At Nine-Decade Highs Despite UK And China Deals