Dow, S&P futures rise ahead of earnings; tariffs eyed
As the market prepares for a crucial week of earnings reports from major corporations, US stock futures have risen, with the Dow and S&P 500 futures up over 0.35% early Wednesday morning. The gains come ahead of key earnings reports from McDonald’s and Disney, which are expected to set the tone for the rest of the earnings season.
However, strategists are warning that the biggest risk to the market’s upward momentum lies in the ongoing trade tensions and tariffs imposed by the Trump administration. As the market enters a seasonally weak phase, investors are advised to focus on growth, large-cap stocks, and financials as preferred sectors.
Nasdaq futures, on the other hand, lagged behind, rising just 0.2% amid pullbacks in AI stocks.
The Dow futures were up 144 points, or 0.35%, at 29,525, while the S&P 500 futures were up 14 points, or 0.35%, at 3,385. The Nasdaq 100 futures were up 34 points, or 0.25%, at 12,550.
The market’s early gains can be attributed to a number of factors, including optimism surrounding the earnings season and a lack of major economic data releases this week. Additionally, the recent decline in US-China trade tensions has also contributed to the market’s upward momentum.
However, despite the positive sentiment, strategists are warning that the tariffs imposed by the Trump administration pose a significant risk to the market’s momentum. The tariffs have already had a significant impact on the US economy, and the ongoing trade tensions could continue to weigh on the market’s growth prospects.
“We’re entering a seasonally weak phase, and the tariffs are going to be a major headwind,” said Michael Antonelli, an investment strategist at Robert W. Baird. “The biggest risk is that the tariffs continue to escalate and affect the global economy.”
Antonelli also advised investors to focus on growth, large-cap stocks, and financials as preferred sectors, citing their relative resilience in the face of trade tensions.
“The growth stocks are going to continue to do well, and the large-cap stocks are going to do better than the small caps,” Antonelli said. “Financials are also a good play, as they have a lot of exposure to the global economy and are well-positioned to benefit from any potential interest rate cuts.”
The earnings season is expected to be a significant driver of market volatility in the coming weeks, with a number of major corporations set to report their quarterly results. McDonald’s and Disney are among the first major companies to report, and their earnings reports will be closely watched by investors.
McDonald’s is expected to report its quarterly earnings on Tuesday, with analysts expecting the company to post earnings per share of $1.84. Disney is expected to report its quarterly earnings on Thursday, with analysts expecting the company to post earnings per share of $0.83.
The market’s focus on earnings reports comes as the US economy continues to face significant headwinds, including trade tensions and a slowdown in global growth. The ongoing trade tensions have already had a significant impact on the US economy, and the potential for further escalation could continue to weigh on the market’s growth prospects.
Despite the challenges facing the market, many analysts remain optimistic about the long-term prospects for the US economy and the stock market. The recent decline in US-China trade tensions has provided a boost to the market’s momentum, and the ongoing efforts to resolve the trade dispute could continue to support the market’s growth prospects.
“The trade tensions are going to continue to be a major focus for the market, but we’re also seeing some positive developments on the trade front,” said Antonelli. “The market is going to continue to be volatile, but we’re also seeing some positive signs that the economy is going to continue to grow.”
In conclusion, the US stock market is expected to remain volatile in the coming weeks, with the earnings season and trade tensions set to be major drivers of market activity. Despite the challenges facing the market, many analysts remain optimistic about the long-term prospects for the US economy and the stock market, and the ongoing efforts to resolve the trade dispute could continue to support the market’s growth prospects.
