U.S. stock futures on Tuesday were tracking higher and teasing modest gains for the main benchmarks a day after stocks finished lower, led by a decline in technology and internet-related companies.
A fresh batch of corporate earnings and further developments in global tensions, surrounding Brexit and Italy’s budget, remain a focus.
What are the benchmarks doing?
Futures for the Dow Jones Industrial Average YMZ8, +0.48% were up 50 points, or 0.2%, at 25,251, while those for the S&P 500 ESZ8, +0.45% added 6.90 points, or 0.3%, to 2,756. Meanwhile, Nasdaq-100 futures NQZ8, +0.62% rose 32.25 points, or 0.5%, at 7,108.50.
The S&P 500 has declined in seven of the past eight sessions, while the Dow has declined in four of the past five, underscoring a mostly downbeat cycle for U.S. equity benchmarks.
On Monday, The Dow DJIA, -0.35% reversed direction intraday to fall 89.44 points, or 0.4%, to 25,250.55 while the S&P SPX, -0.59% slid 16.34 points, or 0.6%, to close at 2,750.79. The Nasdaq Composite COMP, -0.88% fell 66.15 points, or 0.9%, to finish at 7,430.74.
Seen as a major driver for stocks, third-quarter earnings season gets under way in earnest this week, with Goldman Sachs Group Inc. GS, +0.63% and Morgan Stanley among the big bank names reporting later this morning, while streaming video group Netflix Inc. NFLX, -1.89% will report after the close of trade.
What’s driving markets?
In recent weeks investors have been concerned over the pace of rising bond yields, global trade tensions and questions about economic growth, factors that have had an outsize impact on large-capitalization tech-related names with overseas operations.
Meanwhile, investors await the Treasury Department’s semiannual currency report due later Tuesday. The report, and any accompanying statements by Treasury Secretary Steven Mnuchin, will be parsed for any signs that the U.S. deems China a currency manipulator.
In a late-Monday report, the Treasury said the U.S. government ran its largest budget deficit in six years during the fiscal year that ended last month. That is seen by some as unusual given the strength of the domestic economy. The deficit totaled $779 billion in the fiscal year that ended Sept. 30, up 17% from $666 billion in fiscal 2017.
Meanwhile, the market also has closely watched negotiations between the European Union and the Britain as it attempts to exit from the trade bloc in a trade agreement in hand. The potential for a clash between Italy and the European Union over Rome’s budget plans is also in focus. Both matters threaten to disrupt global markets should they sour.
Which data are in focus
A report on industrial production and capacity utilization are due at 9:15 a.m. Eastern, while a reading on job openings is due at 10 a.m. At the same time, a report on home builders’ index is slated for the same time.
What are analysts saying?
Deutsche Bank in a Tuesday research report said it is upbeat on U.S. equity markets, citing strong global growth, adding that U.S. stocks “do not fully reflect the U.S.’s strong economy.”
Which stocks are in focus
Goldman Sachs Group Inc. GS, +0.63% and Morgan Stanley are among the big bank names reporting later this morning, while streaming-video group Netflix Inc. NFLX, -1.89% will report after the close of trade. Netflix’s performance will be keenly watched by investors, given the company’s place among so-called FANG names, including Facebook Inc. FB, -0.14% Amazon.com Inc. AMZN, -1.55% and Google-parent Alphabet Inc., which have had a substantial influence on the broader market moves by dint of the market value of those companies.
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