The mood on Wall Street turned tentative on Tuesday as investors awaited earnings reports from the “Magnificent 7,” companies that fueled much of the market’s upside since 2023. Index futures rose slightly in early trading. Asian markets closed mostly higher, while European markets started on a firmer footing. Commodities pulled back, and bond yields held steady.
Earnings from several high-profile names could provide direction. Tesla, Inc. TSLA shares rose modestly from their recent lows, ahead of the company’s earnings due after the close. A positive earnings surprise or optimistic commentary could lift the stock and potentially the broader market.
Futures Performance On Tuesday ( as of 6:20 a.m. EDT)
FuturesPerformance (+/-)Nasdaq 100+0.29%S&P 500+0.24%Dow+0.19%R2K+0.12%In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY rose 0.21% to $500.75, and the Invesco QQQ ETF QQQ gained 0.30% to $420.07, according to Benzinga Pro data.
Cues From Past Session:
U.S. stocks snapped a six-session losing streak on Monday as bond yields eased and financial and technology stocks rallied. Positive earnings from some regional banks improved sentiment toward the space and the broader financial sector per se.
After a positive start, the indices trimmed their gains and bottomed in late-morning trading. They launched into a rally but ended off the highs of the session.
IndexPerformance (+/-)ValueNasdaq Composite+1.11%15,451.31S&P 500 Index+0.87%5,010.60Dow Industrials+0.67%38,239.98Russell 2000+1.02%1,967.47
Insights From Analysts:
Earnings could be the week’s key catalyst along with Friday’s inflation data, said fund manager Louis Navellier in a note to clients. “This is a huge week of earnings with companies worth $17 trillion reporting, including distressed Tesla,” he said.
“Investors are understandably cautious going into the big earnings this week. If things turn out well we should see a strong buying of the dip,” he added.
Wharton Professor Jeremy Siegel, Senior Economist to WisdomTree, said in his weekly commentary the recent market pullback could be a healthy correction. “The near-term inflation outlook appears to be under control, with a trend towards moderation and the recent pullback from the highs leading to a healthy correction for the market,” he said.
“Despite the tech downturn, value has still greatly underperformed growth since the COVID-19 pandemic. Notwithstanding, I regard the resulting weakness as a healthy pullback, and expect the market to move to new highs.”
Upcoming Economic Data:
S&P Global is set to release its flash services and manufacturing purchasing managers’ indices for April at 9:45 a.m. EDT. The manufacturing PMI is expected to tick up from March’s 51.9 to 52, and the services PMI may also have improved from 51.7 to 52.
The Commerce Department will release the new home sales report for March at 10 a.m. EDT. Economists, on average, expect new home sales to come in at a seasonally adjusted annual rate of 669,000 units, up from a 662,000-unit rate in February.
The Treasury will auction two-year notes at 1 p.m. EDT.
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Stocks In Focus:
Nucor Corporation NUE fell over 6% in the premarket following its earnings release. Other stocks reacting to earnings reported Monday after the close include Cleveland-Cliffs Inc. CLF (down over 4%), and Packaging Corporation of America PKG (down over 5%).
D.R. Horton, Inc. DHI, Fiserv, Inc. FI, General Electric Co. GE, General Motors Corp. GM, JetBlue Airways Corporation JBLU, Kimberly-Clark Corporation KMB, Novartis AG NVS, PepsiCo. PEP, PulteGroup, Inc. PHM, Spotify Technology S.A. SPOT, United Parcel Service, Inc. UPS and Xerox Holdings Corporation XRX, Halliburton Company HAL and Lockheed Martin Corporation LMT are among the companies due to report before the market open.
Notable names reporting after the close are isa, Inc. V, Texas Instruments, Inc. TXN, Tesla, Steel Dynamics, Inc. STLD, Seagate Technology Holdings plc STX, Mattel, Inc. MAT, Chubb Limited CB, Canadian National Railway Company CNI and Baker Hughes Company BKR.
Commodities, Bonds, and Global Equity Markets:
Crude oil futures reversed course and fell about 1% on Monday, trading at a little over $82 a barrel, and gold futures also saw weakness and fetched around $2,300 an ounce.
The 10-year note yield remained unchanged at 4.623%.
Bitcoin BTC/USD gained modestly, with the apex crypto trading above the $66,000 level.
Most Asian markets advanced on Tuesday, led by the Hong Kong, Singaporean and Taiwanese markets, while the Chinese, Indonesian and South Korean markets closed modestly to moderately lower. The positive lead from Wall Street overnight generated positive sentiment in the region, ahead of the tech earnings reports.
European stocks were firmer for a second straight session, with the Euro STOXX 50 Index up about 0.72% in early trading. The U.K.’s FTSE 100 Index rose for a fifth straight session. Business activity readings from the region came in mostly above expectations.
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