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Traders on the floor of the New York Stock Exchange on Aug. 4, 2022.
Source: NYSE
Stock futures slipped marginally on Tuesday morning as investors awaited key corporate earnings and the beginning of the Federal Reserve’s policy meeting.
Futures on the Dow Jones Industrial Average dipped 16points, or 0.04%. S&P 500 futures slid nearly 0.05%, and Nasdaq 100 futures fell 0.09%.
In extended trading, CrowdStrike shares fell more than 5%. CNBC reported that Delta Air Lines hired attorney David Boies to seek damages from CrowdStrike and Microsoft after an outage this month led to thousands of flight cancellations.
Quarterly results from Merck, Pfizer, PayPal, Procter & Gamble and JetBlue before the bell Tuesday could dictate market sentiment during the session. Investors will also watch closely for numbers from Microsoft, Advanced Micro Devices and Starbucks after the closing bell.
So far, more than 40% of the S&P 500 companies have reported their results with 79% posting earnings that exceeded Wall Street expectations, according to LSEG. That compares to a five-year average earnings beat rate of 77%.
“Both 2024 and 2025 consensus EPS are holding up, with 2024 EPS tracking a typical non-recessionary year revision trend. This suggests that analysts are relatively comfortable with their estimates,” Savita Subramanian, Bank of America’s head of U.S. equity and quantitative strategy, said in a note. “Corporate
commentaries are also relatively sanguine.”
The Fed’s two-day policy meeting is set to begin Tuesday where central bank Chief Jerome Powell could signal the timing and number of rate cuts expected in the next few months. The Fed previously projected only one rate cut for the remainder of 2024, and traders have priced in a 100% chance for a September rate reduction, according to the CME FedWatch Tool.
“Inflation is trending lower, supporting Federal Reserve rate cuts,” said Seema Shah, chief global strategist at Principal Asset Management. “This, coupled with a still robust economic outlook and strong corporate earnings, should bolster risk assets and lead to a broadening of returns away from just technology.”
On Tuesday, traders will be watching for job openings data for the month of June. Economists polled by Dow Jones are calling for 8.1 million job openings, the same as in May. Consumer confidence for July is also slated for release.
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