U.S. stock futures dipped Tuesday as investors returned from the long weekend and eyed further corporate earnings updates.How are stock index futures trading
S&P 500 futures
dipped 12 points, or 0.3%, to 4006
Dow Jones Industrial Average futures
fell 76 points, or 0.2%, to 34340
Nasdaq 100 futures
eased 48 points, or 0.4%, to 11561
On Friday, the Dow Jones Industrial Average
rose 113 points, or 0.33%, to 34303, the S&P 500
increased 16 points, or 0.4%, to 3999, and the Nasdaq Composite
gained 78 points, or 0.71%, to 11079. Markets were shut on Monday to commemorate the Martin Luther King Jr. holiday.
What’s driving markets The positive start to the year showed signs of fading as U.S. investors returned from a long weekend. The S&P 500 rose 4.2% in the first two weeks of 2023, with trader sentiment underpinned by hopes that easing inflation will reduce the need for the Federal Reserve to increase borrowing costs by much more. “Markets have started off the year strong…While this can be an early sign of a sustained new uptrend, this type of move over the first two weeks after a bad year is not atypical,” said Jonathan Krinsky, chief trecnical strategist at BTIG. “The third week of the year following -10% years, however, is when things get more difficult. The average week 3 following -10% years is -0.63%, and when the first two weeks are positive like they are now, the average week 3 return is -1.03% and down 7 of 10 times,” Krinsky wrote in a note to clients.
For the time being the market’s focus may turn away from macroeconomic drivers like perceptions of Fed policy trajectory and towards the microeconomic, as the fourth quarter earnings season picks up pace. Morgan Stanley
and Goldman Sachs
are among the companies presenting their results on Tuesday. S&P 500 aggregate earnings are forecast to fall 2.3% in the fourth quarter, according to S&P Global Market Intelligence. U.S. economic updates set for release on Tuesday include the Empire State Manufacturing Index due at 8:30 a.m. Eastern.