U.S. stock-index futures on Tuesday appeared set to rebound, following the path of Europe’s equity benchmarks, as worrisome declines in Turkey’s currency moderated somewhat.
Wall Street also scored a boost from upbeat results from home-improvement giant Home Depot.
What are the benchmarks doing?Futures for the Dow Jones Industrial Average YMU8, +0.42% rose 115 points, or 0.5%, at 25, 330, those for the S&P 500 index ESU8, +0.42% advanced by 12 points, or 0.4%, at 2,837.50, and Nasdaq-100 futures NQU8, +0.54% climbed 40.75 points to reach 7,457.50, a rise of 0.6%.
On Monday, the Dow DJIA, -0.50% shed 125.44 points, or 0.5%, to 25,187.70. The S&P 500 SPX, -0.40% fell 11.35 points, or 0.4%, to 2,821.93, with energy and materials sectors among the biggest losers. The Nasdaq Composite Index COMP, -0.25% finished down 19.40 points, or 0.3%, to 7,819.71. All three benchmarks on Monday drifted in and out of positive territory, pressured by seasonally low volumes and dogged by worries of contagion fears from the Turkish lira USDTRY, -4.4912%
What’s driving markets?Market participants focused on signs that Turkey is trying to stem a tumble in its currency that has slashed a third of its value over the past two weeks alone. On Monday, Turkey’s central bank pledged to provide “all the liquidity” the country’s financial institutions needed.
It is unclear if that will be enough to address many of the economic challenges that Ankara faces under President Recep Tayyip Erdogan, who has declined to lift interest rates as experts have recommended and who has threatened the independence of the central bank, while crossing swords with President Donald Trump over the detention of a evangelical U.S. pastor Andrew Brunson.
Read: Strategists see 4 ways out of Turkey’s currency crisis
Still, the lira found some runway higher as bulls, with some market participants speculating that Turkey’s crisis are idiosyncratic and contained to the mostly Muslim country with a population of about 80 million. Turkish liras were up more than 5% against the U.S. dollar, with one dollar buying 6.5475 lira, compared with 6.8846 lira late Monday in New York.
What else is in focus?The National Federation of Independent Business small-business optimism index rose 0.7 points in July to 107.9. The NFIB said it was the second-highest level in history and just under the 1983 peak.
Looking ahead, investors are awaiting a reading of import prices for July due at 8:30 a.m. Eastern Time, and a measure of household debt for the second quarter set to be released at 11 a.m.
What are market participants saying?“The Turkish Lira pulled back this morning, recovering some of the ground lost in the last few days, as the central bank pledged to inject foreign currency liquidity into the country’s shaken banking system. A measure that seems, at least for now, to have stopped the bleeding, with the lira up 8% on the day [at its peak],” wrote Ricardo Evangelista, senior analyst at U.K. based online broker ActivTrades.
Which stocks are in focus?Home Depot Inc.’s shares HD, -1.10% rose in premarket trade after the home-improvement giant reported second-quarter results that were better than average analysts’ expectations.
Shares for Tesla Inc. TSLA, +0.26% were in focus after CEO Elon Musk late Monday said in a tweet that he was working with Goldman Sachs and private-equity firm Silver Lake in the electric-car maker’s go-private plan.
Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.
