U.S. Index Futures Point to Mild Decline Ahead of Key Earnings and Fed Rate Decision

U.S. index futures indicate a slightly lower opening for Tuesday’s trading as Wall Street positions itself for a series of significant earnings releases from large-cap companies. This movement comes in a crucial week marked by the Federal Reserve’s deliberations on interest rates, an event closely watched by investors.

As of 7:06 AM, the Dow Jones futures (DOWI:DJI) fell 23 points, or 0.06%. The S&P 500 futures were down 0.06%, and the Nasdaq-100 futures lost 0.12%. The yield on 10-year Treasury notes was at 4.632%.

In the commodities market, West Texas Intermediate crude for June rose 0.50% to $83.04 per barrel. Brent crude for June was up 0.38%, near $88.74 per barrel. Iron ore traded on the Dalian exchange fell 0.06% to $120.73 per metric ton.

On Tuesday’s economic agenda, several important events are scheduled. At 8:30 AM, the Department of Labor will release the first quarter labor cost reading. Simultaneously, the Chicago Fed will provide the April national activity index reading. Shortly thereafter, at 09:00 AM, the S&P will release the February S&P Case/Shiller index, which assesses residential property prices. Finally, at 10:00 AM, the Conference Board will release the April consumer confidence index.

European markets are predominantly lower today amid a busy day of earnings releases and significant economic data in the region. The inflation rate in the Eurozone reached 2.4%, as anticipated. Additionally, the region’s Gross Domestic Product (GDP) grew by 0.3% in the first quarter of the year, a recovery following a contraction of 0.1% observed in the last quarter of the previous year.

Asian markets closed the session without a defined trend, reflecting investor uncertainty amid contradictory data on Chinese manufacturing. The official survey revealed that the industrial Purchasing Managers’ Index (PMI) in China decreased to 50.4 in April, from 50.8 in March, indicating a slower expansion and dangerously approaching the 50 threshold, which signals stagnation. In contrast, a survey by S&P Global/Caixin Media showed an improvement, with the industrial PMI rising from 51.1 to 51.4, marking the highest level since February 2023. The discrepancies between the two surveys, which use different samples, cast doubts on the true state of the manufacturing sector in China.

In terms of market performance, the Shanghai SE index in China retreated 0.26%, while Japan’s Nikkei advanced significantly by 1.24%. The Hang Seng in Hong Kong recorded a modest increase of 0.09%, and the Kospi in South Korea rose 0.17%. In Australia, the ASX 200 index gained 0.35%.

On Monday, the U.S. stock market continued the upward trend begun the previous week, with all major indices ending the day in positive territory. The Dow Jones Industrial Average rose 0.38%, reaching 38,389.09 points. The S&P 500 advanced 0.32% to 5,116.17 points, and the Nasdaq registered an increase of 0.35%, closing at 15,983.08 points. The rise was driven by optimism about the technology sector’s results and anticipation of the upcoming Federal Reserve meeting. Additionally, Tesla (NASDAQ:TSLA) stood out with an impressive rise of 15.3% following the announcement that Chinese authorities had removed restrictions on its cars, contributing significantly to the positive market performance.

On the earnings front, results are scheduled to be presented before the market opens from 3M (NYSE:MMM), PayPal (NASDAQ:PYPL), Eli Lilly (NYSE:LLY), McDonald’s (NYSE:MCD), Coca-Cola (NYSE:KO), SiriusXM (NASDAQ:SIRI), Melco (NASDAQ:MLCO), Enterprise Products Partners (NYSE:EPD), Cameco (NYSE:CCJ), Eaton (NYSE:ETN), among others.

After the close, numbers from Amazon (NASDAQ:AMZN), Advanced Micro Devices (NASDAQ:AMD), Super Micro Computer (NASDAQ:SMCI), Starbucks (NASDAQ:SBUX), Riot Platforms (NASDAQ:RIOT), Pinterest (NYSE:PINS), Caesars Entertainment (NASDAQ:CZR), Root Inc (NASDAQ:ROOT), Lemonade (NYSE:LMND), Oneok (NYSE:OKE), and more are awaited.