Wall Street appears to be heading for another hesitant session on Tuesday, with concerns over valuation levels now adding to questions over the timing of Fed rate cuts.

Half an hour before opening, Dow Jones futures were down 0.1%, but Nasdaq futures were up 0.3%, heralding a still uncertain start to the day.

Despite a promising start to the session, US markets ended in the red on Monday, with buying relays becoming rarer now that Hurricane Nvidia has passed.

As investors prepare for several key statistics to be released in the coming days, high valuations threaten to condemn the US stock market to a standstill.

At 23 times expected earnings, the S&P 500 index, which is already up over 6% since January 1, is 35% more expensive than its 20-year historical average of 17x, according to Citi.

"Statistically, such valuations should start to weigh on the market's outlook", warn the teams at Lombard Odier.

Even if this price/earnings ratio is largely due to the high price of the 'Magnificent Seven', some professionals fear the emergence of a bubble that could burst in the run-up to the November presidential election.

These concerns could lead some fund managers to turn increasingly to bonds or to European or Japanese equities, whose valuations are deemed much more reasonable.

A certain caution also seems to be called for on the eve of the publication of a new estimate of fourth-quarter US GDP, which had come out 3.3% higher on first reading.

The highlight of the week, however, is scheduled for Thursday with the release of the PCE consumer price index.

This measure of inflation, one of the Fed's most closely watched statistics, could well influence the central bank's next monetary policy decisions.

Released this morning, durable goods orders fell by 6.1% in January compared with December, following a sequential decline of 0.3% in December 2023.

Excluding the usually erratic transportation sector, where orders plunged by 16.2% in January, US durable goods orders fell by just 0.3% last month.

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