Stock futures fell Sunday night as investors braced for a week of key first-quarter earnings reports.
Futures on the Dow Jones Industrial Average lost about 150 points, or 0.4%. S&P 500 futures lost 0.5%. Nasdaq futures were down 0.8%.
Bank of America releases quarterly results before the market close on Monday. Several Dow blue chip names are reporting earnings this week including IBM, Procter and Gamble, Travelers, Dow Inc, Johnson and Johnson, American Express and Verizon.
Tech leaders are also set to report quarterly earnings, with Netflix due Tuesday and Tesla due Wednesday. Snap reported Thursday. United Airlines, American Airlines and Alaska Air are also on the calendar, as are the CSX and Union Pacific railroads.
Investors will keep an eye on the forward guidance, particularly for comments on how companies are managing rising costs. The March consumer price index, released last week, showed an 8.5% year-on-year rise, the fastest annual rise since December 1981
“Chances are that underlying inflation will moderate to an acceptable pace without a significant slowdown in demand growth,” 22V Research’s Gerard MacDonell said in a note on Sunday.
Earnings season got off to a solid start, with 77% of S&P 500 companies reporting better-than-expected earnings per share, according to FactSet. Seven percent of the benchmark have reported results so far. Analysts expect first-quarter earnings to rise 5% as all S&P 500 companies complete their reporting, according to FactSet’s analysis of actual earnings and future estimates.
“We remain convinced that 2022E earnings per share are likely to fall somewhat during earnings season, but probably less than we would have thought a month ago,” Raymond James’ Tavis McCourt said in a Sunday note.
Despite some better-than-expected results, investors sold equities last week on concerns that higher interest rates and inflation could weigh on earnings prospects. The S&P 500 fell 2.13% for its second consecutive negative week. The Nasdaq Composite lost 2.63% and the Dow fell 0.8% over the period. US stocks were idle on Friday due to the bank holiday weekend.
The 10-year Treasury yield hit a three-year high last week at over 2.83%, weighing on stocks.
Elsewhere, investors will be watching how Twitter trades when the market opens. Twitter announced on Friday that its board of directors has adopted a limited-duration shareholders’ rights plan, often referred to as a “poison pill.” The move comes after billionaire Elon Musk offered to buy the company for $43 billion.
– With reports from CNBC’s Patti Domm.