Dow Futures Jump 125 Points as U.S. Manufacturing PMI Data and Tesla Deliveries Take Center Stage

By Peter Nurse

U.S. stocks are expected to open higher Tuesday, beginning the new year on a strong note as investors await essential economic data scheduled for release later in the week.

As of 07:00 ET, the Dow Jones futures were up 125 points, or 0.4%, while S&P 500 and Nasdaq futures also saw increases of 15 points (0.4%) and 55 points (0.5%), respectively.

The three major stock indices concluded last year with their worst annual performance since 2008, ending a three-year winning streak. Investors expressed concerns that the Federal Reserve’s aggressive monetary tightening measures, aimed at combating inflation at its highest levels in four decades, could usher in a recession in 2023.

Despite last year’s downturn, the new year is poised to begin positively, bolstered by gains in European markets after preliminary data from several of Germany’s largest states suggested a further decline in the nation’s headline inflation for December.

The U.S. economic data calendar is relatively quiet Tuesday, with only December job openings and November factory orders expected. However, attention will shift to the Fed’s latest policy meeting scheduled for Wednesday, along with December employment figures set for release on Friday.

In the corporate landscape, Tesla is anticipated to be in the spotlight following the electric car manufacturer announcing record production and deliveries for the fourth quarter, although it fell short of Wall Street expectations.

Oil prices experienced a decline Tuesday, influenced by weak demand signals from China, the world’s leading crude importer and second-largest oil consumer, as rising COVID-19 cases disrupted production operations.

Moreover, the managing director of the International Monetary Fund cautioned on Monday that 2023 is likely to be a challenging year for the global economy, as the U.S., China, and Europe grapple with declining economic output.

That said, market trading may experience volatility, as the long-term outlook for China, the second-largest economy globally, could improve once the worst of the COVID outbreaks subsides.

By 07:00 ET, crude futures were trading 1.4% lower at $79.12 a barrel, while Brent crude fell 1.4% to $84.68. Additionally, gold prices rose 0.7% to $1,838.65 per ounce, whereas the euro inched down 1.2% to 1.0532.