Futures for Wall Street’s main indexes fell on Tuesday as investors assessed diplomatic efforts to contain the Middle East conflict, while awaiting a slew of corporate earnings and data to gauge the state of the U.S. economy.
U.S. President Joe Biden will visit Israel on Wednesday, after Washington said Prime Minister Benjamin Netanyahu had agreed to allow humanitarian aid to reach Gazans.
Iran’s Supreme Leader Ayatollah Ali Khamenei said Israel’s “genocide” of Palestinians in the Gaza Strip should stop immediately, state TV reported, sparking concerns the conflict could escalate.
“Markets fear a ground offensive by Israel could ignite a larger and more complicated regional conflict that risks regional supply chains, energy output, economic growth and financial stability,” said Kyle Rodda, senior market analyst at Capital.com.
Long-dated U.S. Treasury yields rose on Tuesday, pushing megacap stocks Apple (AAPL.O), Alphabet (GOOGL.O), Nvidia (NVDA.O) and Amazon.com (AMZN.O) down between 0.4% – 0.7% in premarket trading.
Bank of America‘s (BAC.N) profit rose in the third quarter as it joined rivals in earning more from interest payments by its customers, while investment banking and trading fared better than expected. Its shares were trading flat.
Pharmaceutical giant Johnson & Johnson (JNJ.N) added 1.3% after raising its 2023 profit forecast.
Investors now await quarterly earnings from Goldman Sachs (GS.N), due before market open, after some major U.S. banks on Friday said higher interest rates had boosted profits amid a slowing economy and cautious consumer behavior.
U.S. weapons maker Lockheed Martin (LMT.N) will also report quarterly earnings before the opening bell.
All three major U.S. stock indexes rose in the previous session on optimism over corporate earnings.
“We believe the profits recession is over and the U.S. economy is on track for a soft-ish landing following healthy consumer activity, cooling inflation, and solid growth,” said UBS Global Wealth Management’s chief investment officer, Mark Haefele.
Third-quarter earnings for S&P 500 companies are expected to increase 2.2% year-on-year, compared with 1.3% rise expected a week earlier, as per LSEG data.
Investors are also awaiting economic data including retail sales and industrial production for September, due at 08:30 a.m. ET and 09:15 a.m. ET, respectively.
Several Federal Reserve officials are set to speak during the day, including New York’s John Williams, Richmond’s Thomas Barkin, Minneapolis’ Neel Kashkari and Board Governor Michelle Bowman.
At 6:49 a.m. ET, Dow e-minis were down 67 points, or 0.2%, S&P 500 e-minis were down 11 points, or 0.25%, and Nasdaq 100 e-minis were down 43.75 points, or 0.29%.
Among individual stocks, NetScout Systems (NTCT.O) dropped 23.2% after the enterprise software firm lowered its 2024 revenue and profit forecasts.
Dollar Tree (DLTR.O) rose 2.8% after a report said Goldman Sachs had upgraded the discount retail chain’s stock to “buy” from “neutral”.
Bank of New York Mellon (BK.N) added 2.1% after beating third-quarter profit estimates.
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