S&P 500 futures rise as investors brace for earnings
U.S. stocks were little changed as investors looked ahead to quarterly results from major banks and new inflation data. A strong earnings season could help…
S&P 500 futures rise as investors look toward a busy week of earnings and inflation data, while uncertainty over Middle East tensions and higher oil prices keeps attention on what company executives say about costs and demand. The S&P 500 was little changed on Monday after the major U.S. averages posted a winning week.
The broad market index climbed 0.1%, while the Dow Jones Industrial Average traded up 192 points, or about 0.4%. The Nasdaq Composite slipped 0.1%, weighed down by a 3% decline in Micron Technology shares.
Investors have two major signals to assess. Bank results may show how businesses are handling fuel and borrowing costs, while inflation releases could add to the week’s market focus.
Company comments matter.
Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo are expected to report results this week, according to CNBC. September consumer and producer price indexes are due Wednesday and Thursday, respectively.
Investors hope the third-quarter reporting season can help stocks push through geopolitical uncertainty. FactSet’s John Butters expects the S&P 500 to post 29.6% earnings growth for the quarter. If that estimate holds, it would mark a fourth straight quarter of growth above 25%, supported by spending on AI data centers, CNBC reported.
Still, earnings figures may not tell the whole story. Investors are watching how company leaders describe the effects of higher fuel and borrowing costs on their businesses and customers.
“Investors have kind of narrowed in on some of the important aspects,” said Brian Leonard, portfolio manager of Keeley Gabelli Small Cap Dividend Fund (KSDIX). “Can this company withstand what's happening? Pass along, continue to grow margins, and the future is going to be better than the most recent past.”
Oil and geopolitical risks remain in focus
Oil prices rose after President Donald Trump announced an “energy ceasefire” between Russia and Ukraine over the weekend. Ukrainian President Volodymyr Zelenskyy then said Moscow had already violated it, according to CNBC.
West Texas Intermediate futures advanced 2% to around $93 per barrel, while Brent crude gained 2% to trade at $106 per barrel. The higher prices add to investor concern about the costs businesses and consumers may face as earnings arrive.
Trump also told reporters he was considering joining Saudi Arabia in its fight against Tehran-backed Houthis in Yemen after another deadly attack on Riyadh's international airport. His remarks raised the prospect of escalating regional tensions.
Major U.S. indexes ended the prior week higher, with technology shares helping investors absorb higher oil prices and yields. The Dow and S&P 500 each recorded their second positive week in three, while the Nasdaq gained for a fourth consecutive week.
Monday’s individual stock moves offered a mixed picture. Micron fell as investors assessed increasing competition from China’s CXMT, which reported progress on a new chip structure. Salesforce rose 3% after Bank of America double upgraded the stock to buy from underperform.
Bank of America also raised its Salesforce price target to $285 from $160, a level CNBC said was 24% above the stock’s last closing price. The bank said Salesforce could get a boost as it integrates artificial intelligence into its businesses.
The reporting calendar and inflation releases now give investors fresh tests for the recent market rally. Company executives’ assessments of costs, margins and customer demand will be closely watched as the results arrive this week.
Source: cnbc.com
