After mixed corporate earnings and data showing China's service sector lagging, U.S. stock futures were down on Tuesday. Dow Jones Industrial Average futures dropped 34 points, or 0.2 percent, to 16453. According to the Wall Street Journal, stocks recovered on Monday, with the Dow climbing 0.5 percent to 16569.28.
Investors are preparing for data that is set to be released Tuesday morning on factory orders for June, which are expected to climb 5 percent since last month, as well as a gauge of activity in the nonmanufacturing sector, which is forecasted to increase to 56.5 in July from 56.0 in June.
Worries over a Portuguese bank and Argentina's debt default met head on with heightening conflict in Gaza and along the Russia-Ukraine border. Above-forecast second-quarter U.S. growth and consistent improvement in the labor market last month also concerned some investors of the likelihood that the Federal Reserve may increase interest rates sooner than predicted.
Burton Schlichter, a senior market strategist at Daniels Trading said, "Last week really put a crack in the dam." Positive economic data this week may add to speculation about a rise in interest rates. "The selloff last week has some people on the defensive. They'll respond more to that," he continued, according to the Wall Street Journal.
Market Watch reports that some strategists also believe that this week's data could determine whether the bulls or bears have the upper hand after last week's sizable selloff.
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