Stock futures fell slightly on Sunday evening as investors await a slew of earnings from big tech companies, along with new economic data releases.
Dow Jones Industrial Average futures fell 45 points, or 0.13%. S&P 500 and Nasdaq 100 futures fell 0.14% and 0.15% respectively.
The major indexes all closed on a week-long decline on Friday as the earnings season began to gain momentum, with several big banking names reporting quarterly results for the first time since bank failures in March. The Dow fell 0.23% and ended a four-week bull run. The Nasdaq fell 0.42%, while the S&P edged down 0.1%.
While 76% of S&P 500 companies reporting earnings have so far exceeded analysts’ earnings per share estimates, according to FactSet on Friday morning, markets were less bullish as corporate earnings fell. First-quarter earnings for S&P 500 companies are expected to fall 5.2% overall, according to Refinitiv data.
Wall Street is looking to mega-cap tech earnings results this week in what will mark the halfway point of earnings season. Alphabet, Microsoft, Amazon and Meta are among the more interesting names expected to report Q1 results.
“A lot of these companies have taken 2022 as an opportunity to dump all the bad stuff into their revenue,” Aswath Damodaran, a professor of finance at New York University’s Stern School of Business, told CNBC on Friday. Closing Bell”, regarding future technological gains.
“I wouldn’t be surprised if we saw a lot of positive surprises in their earnings reports,” Damodaran added.
Investors are also watching closely for new economic data that will indicate whether inflation is slowing or whether the Federal Reserve announces another rate hike at its next meeting in early May. GDP figures for the first quarter, as well as consumer sentiment data for April will be released among a host of other economic indicators.
“Part of the reason we’re so focused on economic data is that we think the investor narrative still revolves around the Fed and interest rates. And we think the economic reports for the next seven to 10 days will be the biggest driver of what the Fed is ultimately going to do,” said Greg Bassuk, CEO of AXS Investments.
Bassuk continued, “We frankly expect the data to be mixed. And we think that’s going to continue to cause uncertainty and continued volatility. I think, to some extent, the rate hike in the The Fed has slowed the economy. But there are still areas where things still look quite robust. Because of this, we think the Fed is likely to make another rate cut.
Coca-Cola and Credit Suisse are expected to report results on Monday before the bell. Whirlpool and First Republic Bank will announce their results after Monday’s trading session. Traders will also be watching the results of the Dallas Fed’s manufacturing survey to gauge the state of factory activity in the state.