Traders work on the floor of the New York Stock Exchange (NYSE), July 26, 2023.
Brendan McDermid | Reuters
Stock futures were all lower Tuesday morning as Wall Street struggled to carry over the momentum from the previous session.
Futures tied to the Dow Jones Industrial Average ticked lower by 82 points, or 0.2%. S&P 500 futures and Nasdaq 100 futures were down 0.3% each.
Wall Street is coming off a strong performance Monday. The 30-stock Dow surged more than 400 points, or nearly 1.2%, for its best day since June 15. The Nasdaq Composite added 0.6%, and S&P 500 closed higher by 0.9%. The tech-heavy Nasdaq and the S&P 500 broke four-straight sessions of losses.
Earnings season continued. Palantir Technologies added nearly 1% after the company posted a 13% increase in second-quarter revenue. Educational tech company Chegg popped about 23% after reporting second-quarter revenue of $183 million, beating analysts’ estimate of $177 million, per Refinitiv.
The corporate earnings season has so far been better-than-expected. Roughly 85% of S&P 500 stocks have reported quarterly results, and nearly 80% of them have beaten Wall Street’s expectations, according to FactSet.
Companies still set to report results this week include United Parcel Service, Under Armour and Rivian on Tuesday, as well as Disney and Wynn Resorts on Wednesday.
“The good news is that the earnings trough/recession is likely coming to an end, with earnings growth expected to accelerate over the coming quarters,” said Dylan Kremer, co-chief investment officer at Certuity. “Looking ahead, earnings projections seem a bit lofty to us relative to revenue growth estimates, particularly starting in Q1/24.”
On the economic data front, traders are looking ahead to July’s consumer price index report, out Thursday. The inflation metric could put Wall Street’s belief in a soft landing to the test. Economists polled by Dow Jones are calling for a monthly increase of 0.2% in July and a year-over-year rise of 3.3%.