By Peter Nurse
Investing.com -- U.S. stocks are seen opening marginally higher Tuesday, as investors digest the spike in oil prices, slowing economic growth, and the potential impact on monetary policy thinking at the Federal Reserve.
At 07:00 ET (11:00 GMT), the Dow futures contract was up 60 points, or 0.2%, S&P 500 futures traded 13 points, or 0.3% higher, and Nasdaq 100 futures climbed 60 points, or 0.4%.
Oil prices have continued to tick higher Tuesday, although not at Monday’s pace, after the weekend’s announcement by the Organization of Petroleum Exporting Countries and its allies, including Russia, to further cut its oil production target by one million barrels a day from May.
By 07:00 ET, U.S. crude futures traded 1% higher at $81.22 a barrel, while the Brent contract climbed 0.9% to $85.73.
Investors now have to figure out what these higher crude prices mean for bets that the Federal Reserve would turn less hawkish amid cooling inflation and a slowing economy.
Expectations had risen after March's banking turmoil that the U.S. central bank was set to pause its rate-hiking cycle amid worries that a reduction in bank lending will further slow economic activity as the year progresses.
Further evidence of the country’s economic slowdown emerged Monday, as the Institute of Supply Management's manufacturing purchasing managers index fell to a 21-month low in February, indicating that the manufacturing sector fell deeper into contraction territory.
The widely-watched monthly employment report is due on Friday, and the Fed will be looking to see if the labor market continues to hold up despite constant news of layoffs and cost-cutting coming out of the tech sector.
Ahead of this JOLTS job openings report for February is due at 10:00 ET (14:00 GMT), with analysts expecting to see 10.4 million job openings as of the end of February, a drop from the month before and down from the peak of 12M last year.
February factory orders are due at the same time, and are expected to fall 0.5% for the month.
In corporate news, Walmart (NYSE:WMT) kicks off a two-day meeting for investors and analysts later in the session, and Bloomberg reported Monday that the retail giant is set to cut more than 2,000 jobs at five U.S. e-commerce warehouses.
Illumina (NASDAQ:ILMN) will be in focus after the Federal Trade Commission struck down its proposed deal to buy cancer diagnostic group Grail for $7 billion, while Richard Branson’s troubled space-launch firm Virgin Orbit (NASDAQ:VORB) has filed for Chapter 11 bankruptcy in a court in the U.S. state of Delaware.
Additionally, gold futures rose 0.1% to $1,998.75/oz, while EUR/USD traded 0.2% higher at 1.0917.