U.S. stock-index futures were firmer but trading was wary on Tuesday as investors assessed mixed earnings reports amid fears of an economic downturn, following reports of slowing spending at Apple on Monday.
How are stock-index futures trading
-
S&P 500 futures
ES00
rose 27 points, or 0.7%, to 3860.75. -
Dow Jones Industrial Average futures
YM00
rose 161 points, or 0.5%, to 31,207. -
Nasdaq-100 futures
NQ00
gained 91.25 points, or 0.8%, to 11,998.25.
On Monday, the Dow Jones Industrial Average
DJIA
fell 216 points, or 0.7%, erasing an earlier gain of more than 350 points. The S&P 500
SPX
and Nasdaq Composite
COMP
each fell 0.8%. The S&P 500 has fallen six of the last seven sessions and has shed 19.6% year-to-date.
What’s driving markets
Trading is positive but wary Tuesday amid mixed corporate earnings reports after a report Monday suggested Apple
AAPL
was slowing hiring and spending which revived concerns that higher borrowing costs and rampant inflation were damping corporate confidence.
The fears are reflected in the U.S. bond market, too. As the Federal Reserve has tightened monetary policy, investors have pushed 2-year yields
BX:TMUBMUSD02Y
above 10-year yields
BX:TMUBMUSD10Y,
an inversion of the yield curve that is deemed a harbinger of potential recession.
The Apple news Tuesday highlighted a dispiriting trend, noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Elon Musk recently announced he would cut 10% of jobs in Tesla
TSLA,
because he has a bad feeling about the economy. Alphabet
GOOG
GOOGL,
Amazon
AMZN,
Meta
META,
Snap
SNAP
and even Goldman
GS
announced they would need less people to work for them as businesses would slow.”
The reversal in Monday’s session left the S&P 500 index below its 50-day moving average for the 60th consecutive day. That’s its longest such run since 2008 and suggests the market’s downtrend remains intact.
Underpinning sentiment, however, and helping deliver gains on Tuesday, is a mostly positive second-quarter earnings reporting season, where 57% of those companies to have reported so far have beaten earnings per share and revenue expectations, according to S&P Global Market Intelligence.
Pre-market trading suggests IBM
IBM
results were not well-received, however. The tech company beat expectations, but worries about how a strong dollar may impact future earnings pushed the stock lower by 4.8% $131.50. Investors continued to monitor earnings, with results from streaming giant Netflix Inc.
NFLX
due after the closing bell.
Read: Netflix is pulling out all the stops to reverse a slide in subscribers
Data showed U.S. housing starts fell 2% in June, while building permits were down 0.6%.
Companies in focus
-
Shares of Johnson & Johnson
JNJ
rose 0.7% in premarket trade after the pharmaceutical and consumer health products company reported second-quarter profit and sales that beat expectations, offsetting a reduced full-year earnings outlook. -
Aerospace and defense contractor Lockheed Martin Corp.
LMT
on Tuesday reported second-quarter results that missed analysts’ profit and sales estimates. Shares fell more than 3%. -
Shares of Arista Networks Inc.
ANET
rose after a Needham analyst upgraded the stock to buy from hold Tuesday, citing the company’s comparatively low international exposure and strong financial position.
How are other assets faring
-
U.S. crude futures
CL
fell 0.4% to $102.21 a barrel, losing early gains that came after news that Russia’s Gazprom had claimed force majeure on some buyers highlighted tensions in the energy space.
-
The ICE Dollar index
DXY
fell 0.6% to 106.71, as the euro
EURUSD
jumped on reports the European Central Bank was considering a 50 basis point rate hike on Thursday.
-
Bitcoin
BTCUSD
advanced 1.9% to $21921.
-
Asia markets were mixed following Wall Street’s overnight reversal. Hong Kong’s Hang Seng
HK:HSI
fell 0.9% and the Shanghai Composite
CN:SHCOMP
was flat. Japan returned from a day off to play catch-up, the Nikkei 225
JP:NIK
adding 0.65%. In Europe, the Stoxx 600
XX:SXXP
fell 0.7%.
-
Growth concerns pushed copper futures
HG00
down 1.3% to $3.025 a pound.
