Dow, S&P futures rise ahead of earnings; tariffs eyed
As the market prepares for a critical week of earnings reports, US stock futures rose early Wednesday, with the Dow and S&P 500 indices up over 0.35%. The gains come ahead of key earnings releases from McDonald’s and Disney, two of the largest and most closely watched companies in the US.
The Dow Jones Industrial Average futures rose 134 points, or 0.43%, to 27,415, while the S&P 500 futures climbed 14 points, or 0.45%, to 3,085. The Nasdaq-100 futures, which track the technology-heavy Nasdaq Composite, lagged, rising just 0.2% amid a pullback in AI stocks.
Despite the early gains, strategists are warning that the market is entering a seasonally weak phase, and that the biggest risk to investor sentiment is the ongoing trade tensions and tariffs imposed by the Trump administration. The tariffs, which have been in place since 2018, have had a significant impact on global trade and have contributed to a slowdown in economic growth.
“The biggest risk to the market is the tariffs,” said Michael Antonelli, market strategist at Robert W. Baird. “We’re heading into a seasonally weak period, and the tariffs are a wild card that could impact investor sentiment.”
Antonelli noted that the market is also due for a correction, given the strong gains it has seen over the past year. The S&P 500 has risen over 27% in the past 12 months, and some strategists believe that the index is due for a pullback.
Despite the risks, many investors are still optimistic about the market’s prospects, particularly in the wake of the recent Federal Reserve decision to cut interest rates. The Fed’s decision to lower interest rates has made stocks more attractive to investors, and has helped to boost sentiment in the market.
Growth stocks, large-cap stocks, and financials are among the preferred sectors in the market right now, according to Antonelli. These sectors have historically performed well during periods of low interest rates, and are likely to continue to do so in the coming months.
In addition to McDonald’s and Disney, several other major companies are set to release earnings reports this week, including Coca-Cola, Procter & Gamble, and Verizon. The earnings reports are likely to provide investors with valuable insights into the performance of these companies, and could have a significant impact on the market’s direction.
Overall, the market is likely to be closely watched in the coming days as investors digest the latest earnings reports and assess the impact of the tariffs on the global economy. Despite the risks, many investors remain optimistic about the market’s prospects, and are likely to continue to seek out opportunities in growth stocks, large-cap stocks, and financials.
