U.S. stock markets opened higher as the Dow, S&P 500, and Nasdaq gained ground at the start of a shortened trading week.
US stock futures climbed as markets reopened after the Presidents' Day holiday, kicking off a shortened trading week shaped by earnings reports, Federal Reserve policy, and the impact of a strong dollar.
Futures tied to major indexes rose early Tuesday. The S&P 500 inched up 0.2%, staying near its record high from January. Nasdaq futures also gained 0.2%, aiming for a fourth consecutive week of growth. Meanwhile, Dow Jones futures added 0.2%, recovering losses from last Friday.
Strong Dollar Poses Challenges for Global Companies
The US dollar has been gaining strength, putting pressure on American companies with international business. Big names like Apple, Alphabet, Microsoft, Tesla, and Meta generate more than half of their revenue from overseas markets. A stronger dollar makes their products more expensive abroad, reducing demand. Many of these firms reported weaker earnings in the last quarter and expect similar challenges ahead.
While the dollar index remained elevated Monday evening, it has eased slightly from its January peak.
Fed Sticks to High Interest Rates Amid Inflation Concerns
The Federal Reserve continues to keep interest rates high, maintaining them in the 4.25% to 4.5% range. The goal is to fight inflation, even as President Donald Trump pushes forward with swift policy changes, particularly regarding tariffs.
"It will be very important to understand how these policies will unfold and how the economy will respond before adjusting rates," said Fed Governor Michelle Bowman on Monday.
Earnings Season in Full Swing
This week, 46 companies from the S&P 500 will release their earnings reports. Investors are particularly eyeing Thursday, when Alibaba, Walmart, and Dropbox will announce their results. Before that, Devon Energy, Occidental Petroleum, and Toll Brothers will report on Tuesday.
