Dow, S&P Futures Rise Ahead of Earnings; Tariffs Eyed
US stock futures rose early Wednesday, with the Dow Jones Industrial Average and S&P 500 index both up over 0.35% ahead of key earnings reports from McDonald’s and Disney. While the gains are welcome, strategists are warning that the biggest risk to the market lies in the Trump-era tariffs, which pose a significant threat as the market enters a seasonally weak phase.
The Dow Jones Industrial Average futures rose 143 points, or 0.46%, to 28,345, while S&P 500 futures climbed 11.5 points, or 0.36%, to 3,130. Nasdaq futures, however, lagged behind, rising just 0.2% amid pullbacks in AI stocks.
The gains in the Dow and S&P 500 futures come ahead of a busy day of earnings reports from McDonald’s and Disney. McDonald’s is expected to report earnings per share (EPS) of $1.85, while Disney is expected to report EPS of $0.96. Both companies are expected to report strong earnings, which could provide a boost to the market.
However, strategists are warning that the biggest risk to the market lies in the Trump-era tariffs. The tariffs, which were imposed on Chinese goods, have had a significant impact on the US economy and could continue to pose a threat as the market enters a seasonally weak phase.
“We’re entering a seasonally weak period, and the tariffs are still a major risk,” said Michael Antonelli, market strategist at Robert W. Baird. “The market is going to be sensitive to any negative news on trade, and we could see some volatility as we head into the summer.”
Growth stocks, large caps, and financials are preferred by strategists ahead of the earnings reports. These sectors are expected to benefit from the strong economy and could provide a boost to the market if their earnings reports are strong.
The technology sector, which has been a bright spot for the market in recent months, is expected to be the biggest loser in the earnings reports. AI stocks, which have been a major driver of the market’s gains in recent months, are expected to pull back amid concerns over the impact of the tariffs on the industry.
Despite the risks, strategists are optimistic that the market will continue to rise in the coming months. The S&P 500 index is expected to reach 3,200 by the end of the year, while the Dow Jones Industrial Average is expected to reach 30,000.
“We’re in a bull market, and we’re going to continue to see the market rise,” said Antonelli. “The earnings reports will be important, but the biggest risk to the market lies in the tariffs, and we could see some volatility as we head into the summer.”
In conclusion, the Dow and S&P 500 futures rose early Wednesday, with the Dow Jones Industrial Average and S&P 500 index both up over 0.35% ahead of key earnings reports from McDonald’s and Disney. While the gains are welcome, strategists are warning that the biggest risk to the market lies in the Trump-era tariffs, which pose a significant threat as the market enters a seasonally weak phase. Growth stocks, large caps, and financials are preferred by strategists ahead of the earnings reports.
