U.S. stock futures are pointing to a slightly higher open on Friday as investors eagerly anticipate the start of second-quarter earnings reports from major banks such as JPMorgan Chase & Co.
Market Overview
- S&P 500 futures (ES00) are up 0.1%, or 4.2 points, at 4,384.75
- Dow Jones Industrial Average futures (YM00) have risen 0.1%, or 54 points, to 33,851
- Nasdaq-100 futures (NQ00) have slipped less than 0.1% to 15,311
Yesterday, the S&P 500 (SPX) closed 0.6% lower at 4,349.61, while the Dow Jones Industrial Average (DJIA) dropped 173.73 points, or 0.5%, ending the day at 33,631.14. The Nasdaq Composite (COMP) fell 0.6% to 13,574.22, ending a four-day winning streak for these indexes.
What’s Driving Markets?
Earnings season is in full swing, and investors have their eyes on major financial institutions like BlackRock Inc., Citigroup Inc., JPMorgan Chase & Co., and Wells Fargo & Co., as they prepare to release their third-quarter earnings reports. This will set the tone for the reporting season. Additionally, UnitedHealth Group Inc. is also scheduled to report.
Investors will closely follow JPMorgan Chief Executive Jamie Dimon’s remarks about the economy and consumer trends.
However, it is important to note that the S&P 500 is expected to experience its fourth consecutive quarter of earnings decline, with third-quarter per-share profits anticipated to drop by 0.3%, according to FactSet. This presents a challenging backdrop for investors.
Read: Q3 earnings are here: S&P 500 heads toward year of profit declines as JPMorgan and Delta report this week
Investors Look for Earnings Boost After Thursday’s Decline
Investors are hoping for a boost in earnings following Thursday’s decline in the market. The decline was triggered by data showing elevated consumer prices. To get a better understanding of the current market situation, investors are eagerly awaiting the release of some key data on Friday.
The data scheduled to be released on Friday includes the September import prices at 8:30 a.m. Eastern and a preliminary University of Michigan consumer sentiment survey for October at 9 a.m. Eastern. Additionally, Philadelphia President Patrick Harker is due to give a speech at 9 a.m. Eastern.
On Thursday, the Consumer Price Index (CPI) data caused bond yields to rise. However, on Friday, there was some reversal of this trend as Israel’s military issued an evacuation order for over 1 million people in Gaza. This led to concerns about a possible ground offensive, which pushed bond yields down again.
It is important to note that the United Nations has warned against such an evacuation, as it would not only be impossible but also disastrous. This development comes in the wake of an attack on Israel that has resulted in a death toll of over 2,800 people on both sides of the conflict.
As of now, the yield for the 10-year Treasury note (BX:TMUBMUSD10Y) is down 6 basis points at 4.643%, while the yield for the 2-year note (BX:TMUBMUSD02Y) is down 3 basis points to 5.037%. It is worth mentioning that yields move inversely to price.
In response to the uncertain market conditions, some investors are shifting their focus to safer assets like bonds. As a result, gold prices (GC00) have experienced a significant increase, with a climb of $13.30 to reach $1,896 per ounce. This marks a gain of approximately 2.7% for the week.
Meanwhile, crude oil prices (CL.1) have also risen amid the growing tensions in the Middle East. The prices have gone up by $2.32, or 2.8%, reaching $85.23 per barrel.
Overall, investors are closely monitoring the market and hoping for positive earnings that will help recover from Thursday’s decline. The upcoming data releases and ongoing geopolitical situation will play a key role in determining the market’s future trajectory.