By Peter Nurse
Investing.com -- U.S. stocks are seen opening higher Tuesday, extending the previous session’s healthy gains ahead of the crucial U.S. midterm elections.
At 07:00 ET (12:00 GMT), the Dow Futures contract was up 110 points, or 0.3%, S&P 500 Futures traded 13 points, or 0.4%, higher and Nasdaq 100 Futures climbed 70 points, or 0.6%.
The main stock indices posted strong gains on Monday, with the blue chip Dow Jones Industrial Average climbing over 400 points, or 1.3%, the broad-based S&P 500 up 1% and the tech-heavy Nasdaq Composite closing 0.9% higher.
The main focus Tuesday will be on the US. midterm elections, with the latest polls suggesting that the Republican party is likely to take back control of the House of Representatives and possibly the Senate.
This would likely result in gridlock in Washington, making it harder for Democrat President Joe Biden to push his agenda, which still includes social spending programs as well as potential antitrust regulation aimed at the Big Tech companies.
The removal of additional spending risks could help the inflation picture at the margin, potentially allowing the Federal Reserve to take a less restrictive monetary policy stance at some stage next year.
Away from the political turmoil, the economic calendar is quiet Tuesday, with the release of the Federal Reserve’s Redbook the day’s highlight.
The week’s main economic revelation will be Thursday’s U.S. consumer inflation data for October, which will provide fresh clues as to the likely moves by the central bank policymakers at their next meeting in December.
Economists are expecting the annual rate of inflation to come in at 8.0%, down from 8.2% in September, and the monthly rate of inflation to rise by 0.6%, from a gain of 0.4% the previous month.
There are more corporate earnings to look forward to Tuesday, including quarterly results from entertainment giant Walt Disney (NYSE:DIS), beauty company Coty (NYSE:COTY), movie theater chain AMC Entertainment (NYSE:AMC) and electric vehicle manufacturers Lucid (NASDAQ:LCID) and Lordstown (NASDAQ:RIDE).
Elsewhere, Lyft (NASDAQ:LYFT) stock slumped almost 20% in premarket trading after the ride-hailing firm reported the smallest quarterly rider growth so far this year late Monday, while TripAdvisor (NASDAQ:TRIP) stock fell 19% after the online travel company missed with its quarterly earnings, citing foreign exchange volatility.
Take-Two Interactive (NASDAQ:TTWO) stock fell 18% premarket after the video game maker cut its annual forecast for net bookings, suffering from an industry-wide spending slowdown.
Oil prices fell Tuesday, hit by fresh COVID outbreaks in China which weighed on hopes of a rebound in oil demand from the world's top crude importer.
Additionally, the latest Platts survey by S&P Global Commodity Insights indicated that the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, actually raised production by 220,000 barrels a day in October, instead of the cut of 100,000 barrels a day it had pledged.
U.S. crude oil stocks data from the American Petroleum Institute are due later in the session, and are expected to show a small build after last week’s surprisingly large drawdown.
By 07:00 ET, U.S. crude futures traded 0.6% lower at $91.20 a barrel, while the Brent contract fell 0.4% to $97.56.
Additionally, gold futures fell 0.3% to $1,675.10/oz, while EUR/USD traded 0.2% lower at 0.9996.