Profit Taking May Contribute To Early Weakness On Wall Street

(RTTNews) - After recovering from an early slump to end the previous session slightly higher, stocks may move back to the downside in early trading on Tuesday. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.3 percent.

Profit taking may contribute to initial weakness on Wall Street, as some traders look to cash in on the strong upward move seen over the past several weeks.

The major averages have climbed well off their April lows amid easing trade concerns, with the Nasdaq and the S&P 500 reaching their best levels in almost three months.

However, JPMorgan Chase (JPM) CEO Jamie Dimon has warned stock market values may not properly represent the risks of higher inflation and even stagflation.

"My own view is people feel pretty good because you haven't seen effective tariffs," Dimon said during the financial giant's annual investor day meeting on Monday. "The market came down 10%, [it's] back up 10%. That's an extraordinary amount of complacency."

On the other hand, Carson Group chief market strategist Ryan Detrick told CNBC the rebound should be taken seriously even amid lingering concerns about trade and the economy.

"All these worries and concerns are real. We're not ignoring everything that's out there," Detrick said. "But are we listening to what the market's doing, right?

"The previous 27 trading days, the S&P 500 is up close to 20 percent," he added. "That's not a bear market rally. That's not a short-covering rally,"

Stocks came under pressure early in the session on Monday but regained ground over the course of the trading day. The major averages climbed well off their lows of the session before ending the day modestly higher.

The Dow fell more than 300 points in early trading but ended the day up 137.33 points or 0.3 percent at 42,792.07. The S&P 500 also inched up 5.22 points or 0.1 percent to 5,963.60, while the Nasdaq crept up 4.36 points or less than a tenth of a percent to 19,215.46.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index edged up by 0.1 percent, while China's Shanghai Composite Index rose by 0.4 percent and Hong Kong's Hang Seng Index jumped by 1.5 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index is up by 0.7 percent, the French CAC 40 Index is up by 0.6 percent and the German DAX Index is up by 0.5 percent.

In commodities trading, crude oil futures are slipping $0.17 to $62.52 a barrel after rising $0.20 to $62.69 a barrel on Monday. Meanwhile, after jumping $46.30 to $3,233.50 an ounce in the previous session, gold futures are climbing $12.50 to $3,246 an ounce.

On the currency front, the U.S. dollar is trading at 144.77 yen compared to the 144.86 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1233 compared to yesterday's $1.1240.