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Top 5 Things to Know in the Market on Tuesday

Investing.com - Here are the top five things you need to know in financial markets on Tuesday, June 4:

1. Fed Chair Powell on watch for any hints at rate cuts

While U.S. President Donald Trump’s tariff policies have escalated concerns over the risk of a global recession, markets have increasingly become convinced that the Federal Reserve will need to react with looser monetary policy in order to support the American economy.

St. Louis Fed President James Bullard boosted those hopes on Monday when he said that unresolved trade disputes and below-target inflation “suggest that the (Fed) needs to tread carefully in order to help sustain the economic expansion” and indicated that a rate cut could be warranted.

Policymakers up to this point have largely stood by their outlook that interest rates were at an appropriate level and would likely remain unchanged throughout the year, although fed fund futures have steadily upped bets for a cut this year in the face of a global slowdown.

Fed Chairman Jerome Powell will have a chance to chime in with his latest viewpoint at 9:45 AM ET (13:45 GMT) when he delivers the opening remarks to the “Conference on Monetary Policy Strategy, Tools And Communication Practices” at the Chicago Fed.

Several other Fed members will also have a chance to weigh in at the two-day conference.

On Tuesday’s data calendar, factory orders for April will be released at 10:00 AM ET (14:00 GMT).

2. Global stocks mixed as tech woes reach other shores

Regulatory fears over the U.S. tech sector that sent the Nasdaq sharply lower in the previous session sent waves through Asian markets on Tuesday, adding to ongoing trade concerns. The Shanghai Composite led indices lower, closing with a 1% decline.

Australia’s S&P/ASX 200 bucked the general trend, ending up 0.2%, after the country’s central bank cut its interest rate for the first time in nearly three years as it seeks to offset global trade tensions and signs of a slowdown.

The first signs of U.S. antitrust action against major internet companies sent shockwaves through European tech companies, but growing expectations that central banks may come to the rescue were sufficient to stage a turnaround near midday trade in the region. The pan-European Euro Stoxx 50 gained 0.4% ahead of Thursday’s monetary policy decision from the European Central Bank.

ECB member François Villeroy de Galhau said Tuesday that rising trade tensions are the biggest threat to economic growth, while euro zone inflation figures eased more than expected, providing a backdrop for the central bank to contemplate further easing measures this year.

U.S. futures pointed to a recovery at the open on Tuesday as investors bet that Fed policymakers will give further signs of a shift to a more dovish stance. Dow futures gained 128 points, or 0.5%, by 6:09 AM ET (10:09 GMT), S&P 500 futures rose 14 points, or 0.5%, while Nasdaq 100 futures traded up 44 points, or 0.6%.

3. Trump’s visit with U.K. Prime Minister Overshadows China Trade Developments

U.S. President Donald Trump met with U.K. Prime Minister Theresa May on Tuesday on the second day of his state visit to Britain, pushing ongoing Sino-U.S. trade developments to the sidelines.

Trump made clear this week that he believes the U.K. should walk away from negotiations with the European Union over its departure from the bloc if it can’t get a fair deal.

Trump and May focused their remarks on the possibility of a “bilateral trade agreement” between their two countries. Remarking on May’s plans to resign as the leader of the British Conservative Party, Trump said he hoped she would “stick around” in order to “do this deal”.

With Trump busy in the U.K., little news surrounding U.S.-China trade talks was on the wires. China's Foreign Ministry limited itself on Tuesday to rebuffing U.S. criticism and reiterating that trade talk setbacks were Washington’s fault.

4. Analysts free to speak on Uber as quiet period ends

Dozens of analysts that have been gagged by industry practice will be free to openly speak their mind about Uber (NYSE:UBER) starting Tuesday.

Morgan Stanley, Goldman Sachs and Bank of America are just some of the investment banks that underwrote the company’s market debut on May 9 and were thus barred from covering the stock until the quiet period lifts on Tuesday.

Those banks will now be allowed to launch coverage on a company whose shares have lost around $7 billion dollars since its initial public offering.

According to Refinitiv data reported by Reuters, three analysts not involved in the underwriting already issued a buy recommendation with five others placing the stock at neutral and zero sell labels.

5. Oil heads lower on demand worries, U.S. inventories ahead

Oil prices fell on Tuesday as an economic slowdown started to dent energy demand and investors turn their attention to weekly inventory data.

With concerns mounting that ongoing Sino-U.S. trade tensions will heighten a global economic slowdown, including the potential risk of recession, analysts commented that risks could dent oil demand.

Read more: Can OPEC Rise Above Trade Wars 'Noise,' Macro Threats To Oil Demand? - Barani Krishnan

After the market close on Tuesday, the American Petroleum Institute will publish its weekly report U.S. crude oil stockpiles. The Energy Information Administration will release official government data at 10:30 AM ET (16:30 GMT) on Wednesday amid expectations for a decline of about 0.2 million barrels.

Last week, EIA data registered a much smaller than expected decline, sending oil prices sharply lower.

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