Nasdaq 100, Dow Jones, S&P 500: Investors Eyeing Earnings Reports from Bank of America, Goldman Sachs

Highlights

• J.B. Hunt Transport Services’ stock dropped by 2% in after-hours trading
• Bank earnings in focus ahead Goldman Sachs and Bank of America reports
• Traders focusing on the latest housing starts, building permits data

Overview

As corporate earnings reports are being released, US stock index futures are down or mixed in early Tuesday trading, following a higher settlement in the previous session. The Dow Jones is up 0.04%, the S&P 500 is up 0.01%, and the NASDAQ is down 0.08%.

Earnings Season Uncertainty, Fed Rate Hike Expectations Impact Stocks

Uncertainty surrounds the price action in the early stages of earnings season, and the Fed’s anticipated rate hike in May is also influencing the market..

Investors reviewed earnings reports from State Street and Charles Schwab on Monday. State Street’s shares plummeted 9.18% after disappointing quarterly results, while Charles Schwab’s shares rose due to a profit beat. Google-parent Alphabet and other technology stocks also declined over 2% due to The New York Times’ report on Sunday that Samsung may switch to Bing as its default search engine.

Bank Earnings in Focus Amid Rising Rates and Inflation Concerns

Investors will be focusing on earnings reports this week from several banks, including Goldman Sachs, Morgan Stanley, and Bank of America, after JP Morgan and Wells Fargo reported better-than-expected earnings in the first wave of bank earnings last week.

Traders will also be monitoring the rollout of further earnings reports for signs of how companies are faring amid rising interest rates and persistent inflation.

Fed Keeps Rate Hike Possibility Open Despite Global Central Banks

Economic data suggests that the economy is not yet close to a recession, giving the Federal Reserve room to continue with rate hikes, despite being perceived as closer to ending its rate hike cycle than other global central banks.

Traders monitor Fed officials’ comments before April 22 blackout period ahead of May 2-3 meeting.

The yield on 10-year Treasury notes increased by 8 basis points to 3.602%, and the two-year U.S. Treasury yield also rose by 9.3 basis points to 4.196%, which commonly indicates interest rate expectations.

Market expectations for a 25 basis-point hike at the May meeting have increased to over 86%, up from 78% on Friday, according to CME’s FedWatch Tool.

Notable S&P 500 Companies Report Earnings Before the Bell

J.B. Hunt Transport Services’ stock dropped by 2% in after-hours trading as the transportation and logistics company reported lower-than-expected first-quarter earnings due to weaker demand, reduced prices, and increased costs.

Notable S&P 500 companies like Johnson & Johnson, Bank of America, and Goldman Sachs will report earnings before the bell on Tuesday.

Traders will also be closely watching the latest housing starts and building permits data, due on Tuesday. Consensus estimates from Dow Jones predict a decrease in March housing starts by 3.4% to 1.40 million units. March building permits data to drop by 4.9% to 1.45 million units, according to economists polled by Dow Jones.

For a look at all of today’s economic events, check out our economic calendar.