Stocks Mixed As Traders Take Profits After Two-Day Rally

Traders Wait For New Catalysts

S&P 500 futures are swinging between gains and losses in premarket trading as traders take a pause after the strong rally.

S&P 500 managed to get close to all-time high levels after two successful trading sessions. Tech stocks were leading the way on Tuesday. Shares of Apple, Microsoft, Alphabet, Amazon were up by 2.5% – 3.5%.

While S&P 500 will likely face some resistance in the 4700 – 4750 area as some traders will decide to take profits off the table, there is enough potential for more upside in case the right catalysts emerge. The broader Russell 2000 index is down by about 8% from highs that were reached back at the beginning of November. In case Russell 2000 moves towards recent highs, S&P 500 will get above the 4750 level.

WTI Oil Moves Higher As Crude Inventories Decline

The recent API Crude Oil Stock Change report indicated that crude inventories declined by 3.1 million barrels while analysts expected that they would increase by 2.1 million barrels. The surprising decline in crude inventories provided additional support to oil markets and pushed WTI oil above the $72 level.

Today, traders will focus on EIA Weekly Petroleum Status Report. Currently, analysts expect that EIA report will show that crude inventories decreased by 1.7 million barrels. In case EIA report indicates a bigger inventory draw, oil may get additional support which will be bullish for oil-related stocks.

U.S. Dollar Is Losing Ground Despite Higher Treasury Yields

The U.S. Dollar Index faced significant resistance near 96.50 and pulled back below the support level at 96.50 while Treasury yields continued to move higher. The yield of 2-year Treasuries has recently managed to get above 0.70% and continued its upside move as bond traders were worried about inflation.

Dollar’s weakness was not bullish for gold and silver as traders focused on rising yields. Gold and silver pay no interest, so higher yields serve as a bearish catalyst for them.

For a look at all of today’s economic events, check out our economic calendar.