U.S. stock index futures edged lower on Tuesday after a two-day bounce on Wall Street as investors looked ahead to another round of earnings reports, especially from megacap companies, that could put a recent market rally to test.
Earnings reports from a host of companies including Microsoft and Google-owner Alphabet will offer further clues on the strength of corporate America amid higher Treasury yields and an aggressive Federal Reserve tightening cycle. The two companies will report earnings after market close.
Market Snapshot
At 7:57 a.m. ET, Dow e-minis were down 132 points, or 0.42%, S&P 500 e-minis were down 12.5 points, or 0.22%, and Nasdaq 100 e-minis were down 13 points, or 0.11%.
Pre-Market Movers
Coca-Cola (KO) – Coca-Cola shares rose 2.4% in the premarket after the beverage giant’ third-quarter earnings and sales beat Street forecasts. The company also raised its full-year outlook as demand remains steady even as it has raised prices to make up for higher expenses.
General Motors (GM) – GM shares rallied 3.2% in premarket trading after the automaker reported a better-than-expected third-quarter profit, helped by rebounding sales. GM also said supply chain constraints are easing, allowing it to increase inventories on dealer lots.
JetBlue (JBLU) – JetBlue reported a quarterly profit as elevated travel demand helped to make up for rising costs. But its bottom line results fell short of estimates and revenue merely matched consensus. JetBlue slipped 4.4% in premarket trading.
Xerox (XRX) – The office equipment maker’s stock tumbled 5.7% in premarket action after it reported an adjusted quarterly profit of 19 cents per share compared with a consensus estimate of 40 cents. Xerox was hit by surging costs and supply chain constraints.
3M (MMM) – 3M reported better-than-expected earnings for the third quarter, but the conglomerate’s revenue fell short of Street forecasts. It also cut its full-year outlook due to rising costs and the impact of the strong U.S. dollar.
General Electric (GE) – GE jumped 4.2% in premarket action even though its earnings fell short of forecasts. The company cut its full-year outlook as it works its way through supply chain issues and higher costs. GE’s revenue was stronger than expected, as was free cash flow.
UPS (UPS) – The delivery service’s shares rallied 3.3% in the premarket following a mixed quarterly report that saw earnings beat consensus and revenue fall short. UPS was helped by expanded profit margins as it raised prices.
UBS (UBS) – UBS jumped 5.1% in the premarket after the Swiss bank posted better-than-expected quarterly results, helped by a jump in customer cash inflows to its wealth management business.
SAP (SAP) – SAP rose 3% in premarket action after the German business software company reported upbeat quarterly results, helped by strong growth in its cloud business. SAP also confirmed its full-year outlook.
Logitech (LOGI) – Logitech jumped 7% in the premarket after the maker of computer peripherals maintained its current full-year guidance, which was reduced in July. Logitech has seen sales cool off following a long period of elevated demand spurred by the pandemic.
Qualtrics (XM) – Qualtrics surged 9.6% in the premarket after the maker of customer feedback software reported better-than-expected quarterly results and lifted its full-year forecast.
Market News
Rishi Sunak Is U.K. Prime Minister After Meeting King Charles III
Rishi Sunak was installed as Britain’s third prime minister of the year by King Charles III on Tuesday, before appointing a Cabinet that will have to wrestle with the U.K.’s economic and political crises.
Sunak, the U.K.’s first leader of color, was selected as leader of the governing Conservative Party on Monday as it tries to stabilize the economy, and its own plunging popularity, after the brief, disastrous term of Liz Truss.
Wall Street Bankers in Riyadh Renew Warnings Over World Economy
Top Wall Street bankers renewed their warnings about the world economy on Tuesday amid geopolitical tensions and steep interest rate hikes to tackle decades-high inflation.
Goldman Sachs boss David Solomon said economic conditions would "tighten meaningfully from here" and the U.S. Federal Reserve could hike rates beyond 4.5-4.75% if it does not see real changes in behaviour.
JPMorgan Chase & Co's Chief Executive Jamie Dimon, speaking on the same panel, said the geopolitical situation was more concerning than a possible recession in the United States.