U.S. stock futures were slightly down on Tuesday morning as the third-quarter earnings season gained momentum. Futures tied to the Dow Jones Industrial Average lost 46 points, or 0.13%, while S&P 500 futures fell 0.13% and Nasdaq 100 futures were down 0.12%.
Despite the slight dip in futures, the major averages closed in the green during Monday’s main trading session. This was especially notable considering that Treasury yields climbed higher, which typically puts downward pressure on equities. However, investors remained optimistic about corporate earnings, leading to gains in stocks.
The 10-year U.S. Treasury yield rose 7 basis points to 4.7% on Monday but is still lower than its 16-year highs from earlier this month. Small caps also rallied on Monday, with the Russell 2000 rising 1.6%.
This week, a total of 53 companies in the S&P 500, or about 11% of the index, are scheduled to report their quarterly results. Additionally, five names in the Dow will also release their earnings. Some key reports to watch for on Tuesday morning include Johnson & Johnson, Bank of America, Goldman Sachs, and Lockheed Martin.
Richard Bernstein, CEO of Richard Bernstein Advisors, highlighted the importance of small caps in the current economic environment. He stated that if the economy and profit growth are re-accelerating, as they are currently, small caps should lead the way. This indicates a return to rationality in the equity market and a broadening out of the market’s sectors.
Earnings reports from several financial names, including Charles Schwab and JPMorgan Chase, kicked off the earnings season to a strong start. This positive performance has helped to improve market sentiment, even amid concerns about the Israel-Hamas conflict and potential tensions in the Middle East.
In addition to earnings reports, Wall Street will also be closely watching for fresh economic data on Tuesday. Retail sales and industrial production data for September will be released before the bell, providing insights into consumer spending and economic activity. The housing market index for October and business leaders survey numbers are also scheduled to be announced Tuesday morning.
Overall, as the third-quarter earnings season progresses, investors will be closely monitoring the performance of individual companies, economic indicators, and geopolitical developments. These factors will play a crucial role in shaping market sentiment and determining the future direction of stock futures.