US stock indices were set for a mixed opening on Tuesday as investors returned from a long holiday weekend to focus on Beijing’s breakdown of several US listed Chinese companies while energy stocks rose as oil prices touched multi-year highs.
Didi Global Inc shares fell as much as 25% in pre-market trading after Chinese regulators ordered over the weekend that the company’s app be taken down days after the $ 4.4 billion IPO on the New York Stock Exchange.
Other U.S. listed Chinese e-commerce firms, including Alibaba Group, Baidu Inc and JD.com, fell between 1% to 3.2%, with Chinese breakdown also weighing on global markets.
Investors, meanwhile, were waiting for clues from the US Federal Reserve’s policy minutes on when quantitative easing could be exacerbated. It will be released on Wednesday.
Wall Street is sensitive to any hint of a hawkish shift in the Fed’s tone as market participants have moved between “value” and “growth” stocks in the last few sessions for fear that a potentially stronger-than-expected economic recovery could force the central bank to cut back on its support.
The Benchmark S&P 500 index hit a record high of seven straight days on Friday, the longest string of record closures since June 1997, helped by Microsoft Corp, Apple Inc, Amazon.com Inc and Alphabet Inc.
“They’ve just been small new heights, and it’s basically a reflection that investors feel they have nowhere else to go,” said Sam Stovall, CFRA chief investment strategist.
“Confidence is supported by the fact that investors are willing to rotate instead of just kicking out completely.”
Oil prices hit multi-year highs after talks between OPEC + producers collapsed, with large energy companies including Occidental Petroleum Co., Chevron Corp and APA Corp rising between 0.8% and 1.5%. [O/R]
8:31 ET the Dow e-minis fell 29 points or 0.08%, the S&P 500 e-minis fell 1.5 points or 0.03% and the Nasdaq 100 e-minis rose 26.25 points or 0.18%.
Attention will also be on ISM non-manufacturing PMI data for June, which is expected to ease after hitting a record high of 64 in May. The report is due at 10 ET.
The second-quarter earnings season is set to begin next week with major banks, while investors have also looked at progress with President Joe Biden’s infrastructure bill.
Among other stocks, American Express Co. added 2.4% after Goldman Sachs raised its rating on the stock to “buy” from “neutral”.
US shares in China’s two largest video game sites, Huya and DouYu, fell 2.3% and 6%, respectively, after China’s monopoly regulator said it would block Tencent Holdings Ltd’s plan to merge the companies.
Mobile gaming company – Bilibili Inc fell 4.3%.
(Report by Devik Jain and Shreyashi Sanyal in Bengaluru; edited by Arun Koyyur)