U.S. stock futures experienced an early boost on Tuesday as earnings season gained momentum and traders eagerly awaited the upcoming Fed decision.
Stock-Index Futures Trading
- S&P 500 futures (ES00) dipped 5 points, or 0%, to 35576
- Dow Jones Industrial Average futures (YM00) added 5 points, or 0.1%, to 4589
- Nasdaq 100 futures (NQ00) eased 44 points, or 0.3%, to 15605
On Monday, the Dow Jones Industrial Average rose 184 points, or 0.52%, reaching a total of 35411. Similarly, the S&P 500 increased by 18 points, or 0.4%, ending at 4555, while the Nasdaq Composite gained 26 points, or 0.19%, closing at 14059.
The Dow Jones Industrial Average is currently on an impressive 11-session winning streak, marking its most successful run in over six years. This remarkable growth is due to the growing optimism that the Federal Reserve’s rate hikes will not result in a recession as inflation cools down.
The future performance of the Dow Jones Industrial Average—whether it can sustain this rally and reach fresh 15-month highs—largely depends on upcoming corporate earnings reports and Federal Reserve comments.
Upcoming Corporate Earnings Reports
- 3M (MMM), Microsoft (MSFT), and Visa (V): These Dow components are expected to deliver their earnings results on Tuesday. Among them, only 3M will report numbers ahead of the market opening.
- Alphabet (GOOG): Although not a Dow member, Alphabet is another company whose earnings report is highly anticipated.
- Coca-Cola (KO) and Boeing (BA): These are among the Dow members scheduled to present their earnings reports on Wednesday.
Midweek Fed Decision Anticipated
The Federal Reserve’s upcoming monetary policy decision is set to take place this week. Market analysts predict that the central bank will raise interest rates by 25 basis points, bringing the range to 5.25% to 5.50%. However, uncertainties remain regarding whether this will be the final hike in the current cycle. As a result, investors will closely scrutinize the Fed’s accompanying statement and Chair Jerome Powell’s press conference for insight into the future direction of bonds, equities, and forex markets.
Potential for Disappointment
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, warns that disappointment may be on the horizon. In addition to the anticipated rate hike, Fed officials are likely to emphasize that the tightening cycle is far from over. Ozkardeskaya cautions those who believe this week’s increase will mark the end of the current tightening cycle in the U.S. — their expectations may be dashed.
Chinese Stock Rebound Boosts Sentiment
On a positive note, Chinese stocks experienced a rebound, particularly in the property development sector. This recovery was driven by signals of support from Beijing, alleviating concerns about the sector’s high levels of debt.
Upcoming U.S. Economic Updates
Several important U.S. economic updates are scheduled for release on Tuesday. At 9 a.m. Eastern Time, the S&P Case-Shiller home price index for May will be published. This will be followed by the release of July’s consumer confidence data at 10 a.m.
