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 climbing over 0.35% ahead of key earnings reports from McDonald’s and Disney. However, strategists are warning that the biggest risk to the market lies in the ongoing tariffs imposed by the Trump administration, as the market enters a seasonally weak phase.
According to news reports, the Dow futures rose 143 points to 24,554, while the S&P 500 futures gained 13.5 points to 2,696. The Nasdaq 100 futures, on the other hand, lagged behind, rising just 0.2% amid pullbacks in AI stocks.
The earnings season has been a major driver of market activity in recent weeks, with investors eagerly awaiting reports from some of the largest and most influential companies in the world. McDonald’s and Disney are among the first to report, and their results are likely to set the tone for the rest of the season.
Growth stocks, large-cap equities, and financials are expected to be among the best-performing sectors this earnings season, according to strategists. This is because these sectors have been less affected by the ongoing trade tensions and tariffs, and are expected to continue to grow at a relatively strong pace.
However, despite the positive earnings expectations, strategists are cautioning investors about the risks posed by the Trump-era tariffs. The tariffs, which were imposed in 2018 and have been repeatedly extended, have caused significant disruptions to global trade and have had a negative impact on many companies.
According to a report by the Federal Reserve Bank of New York, the tariffs have led to a significant increase in costs for many companies, particularly those in the manufacturing and agricultural sectors. This has resulted in a decline in profitability and a decrease in investment, which has had a negative impact on the overall economy.
The tariffs are also expected to continue to pose a risk to the market in the coming weeks and months, as the trade tensions between the US and China continue to escalate. The Trump administration has imposed tariffs on over $500 billion worth of Chinese goods, and China has retaliated with its own tariffs on over $100 billion worth of US goods.
Despite these risks, many strategists believe that the market is poised for a strong second half of the year. The US economy is expected to continue to grow at a relatively strong pace, and earnings are expected to continue to rise.
In addition, the Federal Reserve has indicated that it is likely to cut interest rates again in the coming months, which is expected to boost the market and stimulate economic growth.
In conclusion, while the Dow and S&P 500 futures are rising ahead of key earnings reports from McDonald’s and Disney, strategists are warning that the ongoing tariffs pose a significant risk to the market. Growth stocks, large-cap equities, and financials are expected to be among the best-performing sectors this earnings season, but investors should remain cautious and monitor the situation closely.
