US pre-open: Soft open expected for stocks ahead of trade data

US stock futures pointed to an open in the red on Tuesday, as investors awaited data on the service sector and trade numbers.

The Dow Jones Industrial Average is expected to open approximately 20 points down, while the S&P 500 and the Nasdaq were set to begin the session three and 10 points lower respectively.

Financial stocks helped Wall Street indices close with moderate gains on Monday following a day which showed that factory orders growth reached an eight-month high in March.

On Tuesday, the economic calendar sees the publication of the trade deficit for March, which is expected to rise from $35.4bn to $43.5bn, at 13:30 BST.

At 15:00 BST, the ISM non-manufacturing data is released, with analysts expecting April’s reading to remain unchanged from the previous month.

Ahead of Friday’s nonfarm-payrolls report, data throughout the week could shed light over the timing of the first rate hike by the Federal Reserve.

“If the economic recovery is as strong as the Fed would have us believe, the improvement in the data should be substantial with the backlog in spending and hiring being carried through into the second quarter,” said Oanda’s senior market analyst Craig Erlam.

“Friday’s jobs report is the big one though and it’s likely to be the one that alters people’s rate hike expectations more so than any other.

“Strong job creation and earnings growth would surely put the focus on September for the first rate hike.”

In company news, the earnings season continues with Groupon, Walt Disney and Herbalife set to report after the bell.

Cloud security group Qualys plunged 25% ahead of the bell after delivering a disappointing outlook late on Monday, while Office depot slid 0.3% after it first quarter sales missed estimates.

Archer Daniels Midland Company edged forward 0.08% in pre-market trading, after the food processing group beat profit expectations, although sales fell below forecasts.

Netflix gained 2.8% after analysts at Bank of America Merrill Lynch upgraded their rating on the stock to ‘buy’.

The dollar climbed 0.14% and 0.22% against the euro and the yen and was largely flat against the yen, while gold futures edged slightly forward 0.03% to $1,187.20.

Oil prices staged a steady rebound, with West Texas Intermediate climbing 1% to $59.55 a barrel, while Brent gained 0.86% to $67.03 a barrel.