Futures slip after strong gains on Wall Street
2022.07.20 15:46
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FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri
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(Reuters) – U.S. stock index futures edged lower on Wednesday after sharp gains on Wall Street in the previous session as investors assessed better-than-expected earnings reports against the backdrop of a gloomy economic outlook.
Fresh uncertainties stemming from the war in Ukraine also weighed on sentiment. Russian forces shelled eastern and southern Ukraine on Wednesday, according to reports, after Washington said it saw signs Moscow was preparing to formally annex territory it has seized during nearly five months of war.
Netflix Inc (NASDAQ:NFLX)’s shares jumped 6.4% premarket after it predicted it would return to customer growth during the third quarter, while posting a 1 million drop in subscribers in the second quarter.
The streaming service provider was the first among big-tech firms to report quarterly results, raising hopes that they will perform well despite a rocky global economic backdrop.
The S&P 500 and the Dow Jones Industrial Average gained more than 2% on Tuesday, while the Nasdaq index rose 3%, following strong corporate earnings.
Nasdaq futures were flat on Wednesday.
“Futures were pointing to a higher opening trying to build on yesterday’s strong rally, however, they have since turned down a little bit, so I suspect there’s some profit taking,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Once the earnings come in, if we see a repeat of yesterday (good set of earnings) then I think this profit taking will be short lived.”
While Friday’s upbeat data on retail sales and consumer sentiment eased some concerns around the economy, fears of a recession or a sharp slowdown remain as the U.S. Federal Reserve raises interest rates to check inflation.
In this reporting season, analysts expect aggregate year-on-year S&P 500 profit to grow 5.8%, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
A full cut-off of Russian gas flows to Europe is “a likely scenario”, European Commission President Ursula von der Leyen said on Wednesday.
Electric-vehicle maker Tesla (NASDAQ:TSLA) Inc gained 0.8% ahead of its earnings report after market close, while shares of Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and Meta Platforms Inc added between 0.1% and 0.3%.
At 6:58 a.m. ET, Dow e-minis were down 48 points, or 0.15%, S&P 500 e-minis were down 5.5 points, or 0.14%, and Nasdaq 100 e-minis were down 5.25 points, or 0.04%.
