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U.S. stock futures edged lower on Tuesday as Samsung’s profit warning took the shine off the sector and the previous day’s gains in tech stocks lost momentum.
S&P 500 (^GSPC) futures were down 0.4%, and tech-heavy Nasdaq 100 (^NDX) futures were down about 0.6%. Both indexes closed with their highest one-day gains since November. Dow Jones Industrial Average (^DJI) futures fell 0.4%.
Samsung’s latest update weighed on hopes for a recovery in the PC and mobile sectors, the main markets for the company’s memory chips. The company said it expects fourth-quarter operating profit to decline 35%, well below expectations, as demand continues to lag.
The Dow Jones Industrial Average on Monday shook off a sharp drop in Boeing (BA) stock due to the failure of its 737 Max 9 planes, with Big Tech contributing to the stock’s rise. Airline stocks were firm on Tuesday even as Alaska Airlines (ALK) and United Airlines (UAL) announced that inspections found loose parts.
The biggest focus for investors at the moment remains December’s consumer inflation figures, which will be released on Thursday, and what that means for the possibility of interest rate easing. But two Fed officials on Monday poured cold water on Wall Street’s already fading hopes that interest rates could be cut in the coming months.
The idea that inflation is cooling is underpinning investors’ belief that the U.S. economy will avoid recession. That belief will face a serious test Friday, when the fourth-quarter earnings season for major banks begins.
Meanwhile, oil prices rose more than 2%, recouping some of Monday’s nearly 4% drop as investors weighed tensions in the Middle East and the impact of Saudi Arabia’s decision to cut oil prices.
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