On Sunday night, stock futures fell slightly as investors waited for a slew of corporate earnings from big tech companies and fresh economic data releases. Dow Jones Industrial Average futures declined by 45 points, or 0.13%, while S&P 500 and Nasdaq 100 futures dipped 0.14% and 0.15%, respectively. The major indices suffered a downturn in the week as earnings season ramped up, with several prominent banking names posting their quarterly results for the first time since the bank failures in March.
Mixed Earnings Results from S&P 500 Companies
While 76% of S&P 500 companies have beaten analysts’ earnings per share estimates, according to FactSet, markets were less optimistic as corporate profits fell. Refinitiv data shows that first-quarter earnings for S&P 500 companies are estimated to decline an overall 5.2%. Mega-cap tech earnings results this week could turn the tide, with Alphabet, Microsoft, Amazon, and Meta among the high-interest names scheduled to announce their results for the first quarter. Aswath Damodaran, professor of finance at the Stern School of Business at New York University, expects a lot of positive surprises to come out of the earnings reports.
New Economic Data to Provide Insight into Inflation and Interest Rates
Investors are also keeping a close eye out on new economic data that will provide insight into whether inflation is cooling or if the Federal Reserve will announce another rate hike at its next meeting in early May. GDP numbers for the first quarter, as well as April’s consumer sentiment data, will be released among a flurry of other economic indicators. The investor narrative is still around the Fed and interest rates, and the economic reports over the next seven to 10 days will be the big driver of ultimately what the Fed is going to do, according to Greg Bassuk, CEO of AXS Investments. He expects the data to be mixed, causing continued uncertainty and volatility.
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