NASDAQ 100, Dow Jones, S&P 500: Mixed Sentiment as Investors Eye Earnings, Economic Data

Highlights

• Wall Street anticipates lower open ahead of quarterly results.
• Positive start to earnings season with 80% of S&P 500 beating expectations.
• Chinese economic data and New York manufacturing activity impact market sentiment.

Overview

After a week of robust gains, Wall Street’s main stock indexes are poised for a lower open on Monday as investors adopt a cautious approach ahead of crucial quarterly results from industry heavyweights throughout the week. Second-quarter earnings are gaining momentum, with Tesla, Bank of America, Morgan Stanley, Goldman Sachs, and Netflix among the notable companies lined up to report their financial performance. Initial reports have been promising, with 80% of the S&P 500 companies that have already reported surpassing analyst expectations, according to Refinitiv data.

At 13:25 GMT, Dow futures are trading 34601.00, down 77.00 or -0.22%. S&P 500 futures are at 4533.25, down 3.50 or -0.08% and Nasdaq Composite futures are trading 15711.25, up 17.00 or +0.11%.

Indexes Supported by Soft Inflation Data

Last week, the three major U.S. indexes closed more than 2% higher, fueled by encouraging consumer prices and producer prices data that indicated the economy’s transition into a disinflation phase. This development has ignited hopes that the Federal Reserve may soon conclude its monetary policy tightening. However, the initial excitement surrounding big banks such as JPMorgan Chase, Wells Fargo, and Citigroup quickly waned, with most financial stocks ending Friday’s session lower as investors feared a potential slowdown.

Earnings Insights Awaited as Stocks React

Investors eagerly anticipate further insights from earnings reports to determine whether the strength witnessed in recent months is justified. In pre-market trading, Meta Platforms faced a slight decline of 0.9% due to the social media firm’s potential privacy breaches, which may result in daily fines of $100,000 unless remedial action is taken. Meanwhile, BridgeBio Pharma Inc surged an impressive 63.3% after positive results from its late-stage study on an experimental drug to treat a specific heart disease.

Chinese Data Weakens Investor Sentiment

Investor sentiment was affected by lackluster Chinese economic data, as the world’s second-largest economy showed frail growth in the second quarter. Throughout the week, investors will also closely monitor retail sales and new homes figures for June. Additionally, manufacturing activity in the New York area experienced a near-standstill in July, with a similar number of firms reporting expansion as contraction, according to the New York Federal Reserve’s Empire State Manufacturing Survey. New orders remained relatively stable, while shipments and inventories declined. However, there was some positive news regarding inflation, as both the prices paid and received indexes fell more than 5 points.

Stocks Making Significant Moves

As the market opens, several stocks are already making significant moves. Activision Blizzard surged nearly 4% after the Microsoft-Sony agreement to retain “Call of Duty” on Sony’s PlayStation consoles. Chewy, the e-commerce pet products company, gained over 5% after receiving an upgrade from Goldman Sachs, which cited an attractive risk-reward profile and the potential for margin expansion. Tesla also experienced a 2% gain in pre-market trading following the successful completion of its Cybertruck after a lengthy delay.