Futures on shaky ground after disappointing earnings forecasts

(Refiles to add dropped word “down” in bullet)

(Reuters) -U.S. stock index futures fell in the early hours of Tuesday on downbeat earnings forecasts from Apple supplier Skyworks and payments company PayPal (NASDAQ:), ahead of much-awaited inflation data later in the week.

At 5:26 a.m. ET, were down 123 points, or 0.37%, were down 15.75 points, or 0.38%, and were down 57.5 points, or 0.43%.

Chip gear maker Skyworks Solutions (NASDAQ:) Inc’s shares tumbled 9.8% in premarket trading after projecting its current-quarter revenue and earnings short of estimates.

Investors were hopeful of Skyworks’ earnings following Apple Inc (NASDAQ:)’s strong quarterly showing on Thursday, but global smartphone sales have been suffering from weak demand.

Shares of other Apple suppliers including Qualcomm (NASDAQ:) and Qorvo (NASDAQ:) fell 0.5% and 1.6%, respectively.

PayPal Holdings dropped 4.5% after a cut to its outlook for annual adjusted operating margin overshadowed its profit forecast raise.

Apart from earnings reports, attention will be on inflation data on Wednesday, which is expected to show the Labor Department’s consumer price index (CPI) likely climbed 0.4% in April after gaining 0.1% in March. Producer prices, weekly jobless claims and consumer sentiment data are all lined up for the week.

Such data points will be scrutinized by investors to gauge whether the Federal Reserve’s aggressive tightening cycle – including its most recent 25 basis point increase to interest rates last week – is helping bring down inflation.

Markets also cautiously awaited an update on a debt ceiling meeting as U.S. President Joe Biden meets Republican House Speaker Kevin McCarthy and other congressional leaders at the White House.

The meeting at 4 p.m. EDT (2000 GMT) is not expected to produce a final agreement on raising the debt limit.

Regional bank stocks, which enjoyed a short-lived bounce before ending the previous session lower, extended their falls to another day. Shares of Pacwest Bancorp (NASDAQ:) slid 11.7% and Western Alliance (NYSE:) dropped 5.2%.

A Fed survey showed credit conditions for U.S. business and households continued tightening in the first months of the year, but the results seemed to mark the accumulating impact of monetary tightening rather than the cliff-like decline in credit some feared after the March collapse of Silicon Valley Bank.