Traders on the floor of the New York Stock Exchange
Source: The New York Stock Exchange
U.S. stock futures fell early Tuesday morning as Wall Street prepared for the core of corporate earnings season.
Forward contracts linked to the Dow Jones Industrial Average declined by 50 points. Those for the S&P 500 and the Nasdaq 100 also traded marginally in negative areas.
The future shift follows a volatile day on Wall Street, pushing the S&P 500 up 0.4% to a new record high after falling more than 1% earlier in the session. The Nasdaq Composite also set a new record at 0.7%, while the Dow Jones Industrial Average fell 37 points or 0.1%.
Monday’s session was marked by wild swings in stocks with major shortfalls, including GameStop and AMC Entertainment, while retail investors bet on short-selling hedge funds. It helped fuel U.S. stock futures as Wall Street adjusted to the core of corporate earnings seasons, amid investors worried about stocks being released from their fundamentals.
On Tuesday, the corporate earnings of larger companies will have a greater impact on the market indices. General Electric, Verizon and Johnson & Johnson plan to report results before the clock, while technology giant Microsoft will announce its fiscal earnings in the second quarter after the clock.
BTIG chief equity and derivatives strategist Julian Emanuel said on CNBC’s “Fast Money” that the market has been moving higher over the past few weeks and that a high level of buy price options could make it difficult to get earnings reports yet another leg higher.
“This is the kind of essay that is ready for disappointment,” Emanuel said, referring to the battle for some other stocks despite the earnings battle earlier in the season.
However, the strategist also said that the recent frothy trade may not have peaked and that the broad market indices could push even higher.
On the Covid-19 front, health officials and policymakers continued to warn the public about new strains of the virus. Moderna said Monday that the vaccine provides some protection against a variant found in South Africa, while Minnesota officials reported the first U.S. confirmed case of a strain in Brazil.
Investors are also awaiting results from other major technology companies and a new Federal Reserve policy statement later this week. Tuesday’s economic spending includes data on consumer confidence and house prices.
Tuesday will also be the first trading session after Janet Yellen was confirmed as secretary of the treasury. The former Fed chairman becomes the first woman to hold the post.