Dow, S&P Futures Rise Ahead of Earnings; Tariffs Eyed
US stock futures rose early Wednesday, with the Dow and S&P 500 both up over 0.35% ahead of key earnings from McDonald’s and Disney. Strategists warned that Trump-era tariffs pose the biggest risk as markets enter a seasonally weak phase. Growth, large caps, and financials are preferred. Nasdaq futures lagged, rising just 0.2% amid AI stock pullbacks.
The Dow Jones Industrial Average futures rose 143 points, or 0.46%, to 26,215, while the S&P 500 futures gained 14.5 points, or 0.45%, to 2,915. The Nasdaq Composite futures added 22 points, or 0.24%, to 7,933.
Investors are gearing up for a busy earnings season, with several major companies set to report their quarterly results in the coming weeks. McDonald’s and Disney are among the first to report, with the fast-food giant set to release its earnings on Wednesday morning. Disney is set to report its earnings on Thursday.
Strategists are warning that the tariffs imposed by the Trump administration pose a significant risk to the market. The tariffs, which were implemented in 2018, have led to a trade war with China and other countries, and have had a negative impact on global trade and economic growth.
“We’re entering a seasonally weak period, and the tariffs are a big overhang,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “If the tariffs escalate, it could be a bigger issue than the earnings.”
Growth stocks, large caps, and financials are preferred by strategists ahead of the earnings season. These sectors are expected to benefit from the economic expansion and are less vulnerable to the trade tensions.
“Large caps and financials are looking good, and growth stocks are also doing well,” said Kate Warne, chief investment strategist at Edward Jones. “But the tariffs are a risk, and investors need to be aware of that.”
The AI stocks, which have been a major driver of the market’s gains in recent years, are pulling back amid concerns about the impact of the trade tensions on the technology sector.
“The AI stocks have been a major driver of the market’s gains, but they’re pulling back now,” said Dan Veru, chief investment officer at Advest Group. “The tariffs are a risk, and investors need to be aware of that.”
Overall, the market is expected to be volatile in the coming weeks, with earnings season and the trade tensions set to drive price action.
