Stock futures slide as investors wait for big tech profits
Stock futures fell on Tuesday as investors expected big tech profits to get new clues about the health of the U.S. economy.
Futures contracts linked to the Dow Jones Industrial Average slid 130 points, or 0.4%. S&P 500 and Nasdaq 100 futures fell 0.4% and 0.2% respectively.
Shares of Amazon fell slightly in premarket trading on reports of a hiring freeze, while Discover Financial lost more than 1% on disappointing results.
Tuesday’s moves came after another strong day for stocks.
The Dow gained 417.06 points, or 1.3%, on Monday. The Nasdaq Composite ended up 0.9% and the S&P 500 added about 1.2%, with nine of 11 sectors ending higher, led by health care.
This week, investors remain focused on earnings from the biggest tech companies, with reports from Alphabet and Microsoft due Tuesday. Meta Platforms reports on Wednesday, followed by Amazon and Apple on Thursday. Given their size and market capitalization, any movement is likely to push the market forward.
So far this season, the companies have proven that they are perhaps doing better than expected. That’s in part because analysts’ earnings estimates have fallen in recent months as companies grapple with headwinds in the currency market and other growth issues. This could create stocks for rallies on potentially better than expected results.
“‘Earnings have really come down a lot,” said Sam Stovall, chief investment strategist at CFRA. “Maybe investors are happy because it’s up 2% not down 2%, but we also saw reductions in the forecast for 2023. This bear market is likely to play out even if we get a short-term bear rally.”
Reports from UPS, General Electric, Coca-Cola and General Motors are due out before the bell on Tuesday. Chipotle Mexican Grill and Texas Instruments will report after Tuesday’s close.
On the economic data front, S&P/Case-Shiller August Home Prices, FHFA August Home Prices and October Consumer Confidence are scheduled for release on Tuesday.