US stock futures declined on Tuesday, signalling potential further losses as investors focused on upcoming earnings reports to gauge consumer resilience and assess concerns about a potential “soft landing” for the economy. The futures for the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 slipped around 0.3%, 0.3%, and 0.4% after a turbulent week that saw these indices closing lower.
The spotlight is on significant retailers’ earnings reports as markets resume trading after the President’s Daybreak. Walmart (WMT) and Home Depot (HD) are among the key companies set to release quarterly results. Home Depot’s shares dipped after signalling subdued demand amid persistent inflation, while Walmart’s upbeat sales outlook and dividend increase led to a positive market reaction.
Recent economic data challenging the expectation of a future with lower inflation without a severe downturn has led to a pullback in bets on a potential spring interest rate cut by the Federal Reserve. The uncertainty about the economic outlook has prompted investors to closely monitor corporate earnings for insights into the broader economic landscape.
Wednesday’s Nvidia (NVDA) earnings report is anticipated to be a potential market turning point. Nvidia, a major player in the AI-focused chip industry and the third-largest company by market value, could influence broader market trends. Any deviation from high expectations for Nvidia’s performance may contribute to a more widespread stock market pullback.
In corporate developments, Discover Financial Services (DFS) shares surged nearly 13% in premarket trading following news that Capital One (COF), backed by Warren Buffett, plans to acquire the credit card issuer in a $35 billion deal. The deal would create the sixth-largest US bank by assets.
China’s central bank also added to the cautious sentiment by making a record cut to its key mortgage rate to address a worsening property crisis.
As the market navigates economic uncertainties, investors await further clarity from earnings reports, particularly from megacap companies, to determine the trajectory of the stock market in the coming days.
