U.S. stock futures pointed to gains early Tuesday as investors braced for another round of corporate earnings.
Contracts on the benchmark S&P 500 index climbed 0.8% and futures linked to the Dow Jones Industrial Average added 200 points, or around 0.6%. Nasdaq futures rose 0.9%.
Tuesday’s moves come after a final hour of trading amid an indication that Apple () plans to slow hiring and cut spending next year in anticipation of a potential economic slowdown.
Shares of IBM () fell nearly 6% in pre-market hours despite a drop in earnings after the software giant, citing currency headwinds and a loss of business in Russia.
Second-quarter results from companies such as Johnson & Johnson (), Interactive Brokers () and Lockheed Martin () are on deck for investors, with Netflix () in the spotlight after the closing bell.
As of the end of last week, of 35 S&P 500 companies accounting for 10% of index earnings that have reported second-quarter results so far, only 43% of companies have topped sales and earnings per share. – lower than the post-Week 1 historical average of 47% and the weakest since the first quarter of 2020, according to data from Bank of America Research.
16% of companies are expected to report through Friday, including tech giants Tesla (TSLA) and Twitter (TWTR) later this week, as earnings spread beyond banks to 11 other sectors.
“We expect second-quarter EPS to ‘come true’ at best, with a wave of downward revisions,” BofA analysts said in a note on Monday, adding that details on a few key topics are of concern. Importance: demand outlook, pricing power, foreign exchange markets. , and layoffs.
Meanwhile, Federal Reserve officials signaled they would likely raise interest rates by 75 basis points at their next policymaking meeting on July 26-27 after government data for the week latest showed that U.S. consumer prices in June accelerated at the fastest annual rate since November 1981.
The Fed should “communicate to the public that there’s not much it can do, particularly to ease near-term inflation,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. , at Yahoo Finance Live. “If there’s a lesson from history, it’s that if the Fed wants to get inflation under control very quickly, the only way to do that is to take really extreme measures – it would have to be some kind of shock and awe that would be economically devastating, so I don’t think they would like the collateral damage.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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