By Andrew Keshner and Jamie Chisholm
U.S. stock index futures slipped early Tuesday as traders sifted through batches of first quarter earnings that are offering a broad look at the economy, from manufacturing to consumer products.
How are stock-index futures trading
On Monday, the Dow Jones Industrial Average rose 66 points, or 0.2%, to 33875, the S&P 500 increased 4 points, or 0.09%, to 4137, and the Nasdaq Composite dropped 35 points, or 0.29%, to 12037.
What’s driving markets
Investors are cautious as a wave of quarterly results rolls in, while also wary of looming economic data that may color the Federal Reserve’s thinking ahead of its interest rate decision in eight days time.
Companies presenting their results on Tuesday, include McDonald’s (MCD), Verizon (VZ), GM (GM), PepsiCo (PEP), UPS (UPS), Raytheon (RTX) , Halliburton (HAL), Visa (V), and Texas Instruments (TXN).
Tuesday morning’s results are painting a mixed picture of strengths and weaknesses for companies and the markets they target. For example, McDonald’s — a fast food giant with a window into consumers’ wallets — beat expectations on metrics including earnings per share and same-store sales.
At the same time, 3M announced a restructuring plan Tuesday that will cut 6,000 jobs as the company navigates “significant weakness in consumer electronics and consumer retail.”
That’s not even considering the numbers and forecasts from big tech companies like Alphabet (GOOGL) and Microsoft (MSFT). Those results come after the closing bell.
“Caution is in the air ahead of the results from big tech rolling in, and the latest snapshot of U.S. consumer confidence,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Investors are assessing the extent to which nervousness about what may lie ahead for economies is holding back marketing budgets and delaying purchases by shoppers,” Streeter added.
U.S. stock indexes have moved little of late and have coiled into an ever tighter range. The tone in recent sessions has been wary, however.
Anxiety about the banking sector continue to lurk after shares of First Republic Bank (FRC) slumped 20% on news of huge deposit flight earlier in the year. Ahead of the closing bell, the bank’s shares were still off more than 20% while the SPDR S&P Regional Banking ETF (KRE) was off more than 1%.
And some analysts are citing revived concerns about an economic downturn, amid anxiety about budgetary gridlock in Washington.
“One factor that’s spurred the latest moves have been continued concern among investors about a U.S. recession. In part that was down to fresh data out yesterday, with the Dallas Fed’s manufacturing outlook survey ticking down to a 9-month low of -23.4, versus -12.0 expected,” said Henry Allen, strategist at Deutsche Bank.
“But another reason were fears about the upcoming debt ceiling deadline that’s likely to arrive in the summer,” he added.
On Tuesday morning, President Joe Biden officially announced he’s running for a second term, at a time when inflation is weighing heavy on voters’ minds.
U.S. economic updates set for release on Tuesday include the S&P Case-Shiller and FHFA home price indices, both for February, due at 9 a.m. Eastern. March new home sales will be published at 10 a.m. alongside April consumer confidence.
-Andrew Keshner
Companies in focus
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04-25-23 0851ET
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