US Futures waver as the earnings season heats up and the upcoming election approaches. Investors react to early reports, while key economic data influences market sentiment.
US Futures Performance Amid Earnings and Election Uncertainty
US futures faltered as the third-quarter earnings season moved into top gear, with the first of the “Magnificent Seven” big-tech giants—Google parent Alphabet Inc.—set to report later Tuesday.
Mixed Reactions to Earnings Reports Impacting US Futures
Futures on the S&P 500 dipped after Monday’s gains on Wall Street, while Nasdaq 100 contracts were little changed. Treasury yields edged higher, and a gauge of the dollar was steady. Oil prices rose after tumbling the most in more than two years on Monday.
Firms accounting for nearly 42% of the S&P 500’s market capitalization are reporting this week, including five of the seven tech megacaps that have powered this year’s rally. Investors are also bracing for a raft of key economic data that will inform the Federal Reserve’s next interest-rate decision, as well as the US presidential election that is now just a week away.
Investor Sentiment and Key Earnings Reports for US Futures
Some early results on Tuesday disappointed: Ford Motor Co. shares slumped in premarket trading after the carmaker cautioned that full-year earnings will be at the low end of its forecast. PayPal Holdings Inc. dropped after a revenue-forecast miss, and McDonald’s Corp. experienced sales that fell short of expectations. However, Pfizer Inc. shares rose after the drugmaker boosted revenue and earnings forecasts.
“Near-term focus is shifting to megacap earnings that kick off today with Google,” said Charu Chanana, chief investment strategist at Saxo Markets. “There is still an expectation that AI spending will be maintained, which could continue to be a significant driver of broader equity momentum.”
Potential Political Implications on US Futures Amid Upcoming Election
Markets are positioning for the prospect of Donald Trump returning to the White House, with most major polls showing him locked in a tight race with Vice President Kamala Harris. Crypto companies surged, and Bitcoin rose past $71,000 for the first time since June, as the former president is seen as supportive of digital tokens.
A victory for Trump would likely be more beneficial for stocks and Bitcoin relative to his Democratic opponent, while a Harris presidency could bring slightly more relief in housing costs, according to a Bloomberg Markets Live Pulse survey. Some 38% of respondents see equities accelerating a year from now under the Republican candidate, versus 13% under the Democrat.
Trump’s chances of a victory are increasing, which is seen as good for US stocks in the short run, according to Phillip Wool, head of portfolio management at Rayliant Global Advisors. “Deficits will increase, inflation will come back, and it could slow Fed rate cuts. All of this would put upward pressure on the dollar,” he added.
Global Market Reactions and Future Outlook for US Futures
Meanwhile, just days before Fed policymakers gather to discuss the appropriate tempo of rate cuts, data is set to show underlying resilience in the US economy alongside a temporary hiccup in job growth.
In Europe, the Stoxx 600 index fluctuated amid mixed earnings reports. HSBC Holdings Plc led banking stocks higher after announcing a multibillion-dollar stock buyback, reporting better-than-estimated earnings. Conversely, Novartis AG dropped more than 4% as investors weighed the outlook for the pharmaceutical company in 2025.
“Eurozone stocks need a source of oomph to get them going given signs of both cyclical and structural slowdown, despite some decent recent earnings reports,” said Arnab Das, global macro strategist at Invesco Asset Management Ltd.
Benchmark gauges in Tokyo, Australia, Hong Kong, and South Korea climbed, while stocks in China retreated.
In currency markets, the yen steadied after Monday’s slump, as Japanese Prime Minister Shigeru Ishiba promised to restore political stability in a bid to maintain power following his ruling coalition’s failure to win a majority in the lower house. Traders are also awaiting a Bank of Japan (BOJ) policy decision due later this week.
Summary
This article provides a concise overview of the current market landscape, focusing on US futures, earnings reports, and the potential impact of the upcoming election.