Investing.com - Here are the top five things you need to know in financial markets on Tuesday, December 4:
1. U.S. Stock Futures Point to Lower Open
U.S. stock futures pointed to a lower open, as relief over a pause in escalation of the trade war between the U.S. and China gave way to doubt over whether the world's two largest economies will be able to resolve their differences.
At 5:35AM ET (10:35 GMT), the blue-chip Dow futures were down 128 points, or about 0.5%, the S&P 500 futures dipped 11 points, or around 0.4%, while the tech-heavy Nasdaq 100 futures indicated a drop of 41 points, or 0.6%.
The moves in premarket come after Wall Street rallied on Monday, with the Dow closing up nearly 300 points after U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day ceasefire in the U.S.-China trade conflict.
Earlier, Asian shares fell, with Japan's Nikkei suffering the biggest loss of the day, closing down 2.4%.
2. Treasury Yields Extend Drop
Market focus remains largely attuned to the recent moves in the bond market.
U.S. Treasury yields continued lower, with the benchmark 10-year note reaching an intraday low of 2.937%, the weakest since Sept. 12. It was last at around 2.95%.
Adding to market worries, an inversion at the short end of the U.S. yield curve raised the specter of a possible U.S. recession.
The yield on U.S. government bonds with 3-year maturities stood at 2.822%, while yield on U.S. bonds with 5-year maturities was at 2.814%.
The spread between the 2-year and the 10-year was also at an 11-year low.
3. Dollar Under Pressure
The drop in U.S. bond yields dampened demand for the dollar, which fell to a more than one-week low against a basket of major currencies.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.6% to 96.38, the lowest level since Nov. 23.
The dollar was down 0.8% against the yen USD/JPY to 112.75.
The euro was higher against the dollar, with EUR/USD adding 0.5% to trade at 1.1410.
The pound also gained ground, with GBP/USD rising 0.7% to 1.2810, after falling below the 1.27 level on Monday for the first time since Oct. 31.
4. Oil Continues Higher
In commodities, oil prices rallied for the second day in a row, as growing expectations that major producers, led by Saudi Arabia and Russia, will agree some form of production cut at a key meeting of OPEC ministers later this week boosted sentiment.
The oil cartel meets in Vienna on Thursday.
U.S. West Texas Intermediate crude futures rose by $1.50, or 2.8%, to $54.46 a barrel, while international Brent crude oil futures rallied $1.75, or 2.9%, to $63.45.
Both crude benchmarks climbed by around 4% on Monday.
Read more: OPEC May Try A Cut 'Acceptable' To Trump, Then Await U.S. Congress Change: Barani Krishnan
5. German Automakers Visit the White House
Top executives from German automakers Volkswagen (DE:VOWG_p), Daimler (DE:DAIGn), and BMW (DE:BMWG), previous targets of U.S. President Donald Trump's criticism, are set to visit the White House today and meet with Larry Kudlow, Trump's top economic advisor.
Daimler said Chief Executive Dieter Zetsche will attend the meeting, while BMW said Chief Financial Officer Nicolas Peter will be in attendance. VW declined to comment on whether its CEO Herbert Diess will attend.
They are hoping to head off additional tariffs on German cars, following fresh threats from Trump to slap more tax on vehicles assembled in the European Union.
Shares in Europe's auto sector have fallen almost 25% so far this year and a negative outcome in Washington will dash hopes of any year-end rebound.
Trump has threatened for months to impose auto tariffs, notably on those made in Europe, although he has pledged to refrain from doing so.
-- Reuters contributed to this report