Stock-index futures were lower early Tuesday, pointing to a weaker start for U.S. equities as investors focused on talks between Republicans and Democrats on a second coronavirus aid package and a deluge of second-quarter corporate results.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, -0.49% were off 78 points, or 0.3%, at 26,406, while S&P 500 futures ES00, -0.37% declined 7.45 points, or 0.2%, at 3,224.75. Nasdaq-100 futures NQ00, -0.48% lost 30.25 points, or 0.3%, at 10,645.
The Dow DJIA, +0.43% on Monday finished with a gain of 114.88 points, or 0.4%, at 26,584.77, while the S&P 500 SPX, +0.74% gained 23.78 point, or 0.74%, to close at 3,239.41. The Nasdaq Composite COMP, +1.67% advanced 173.09 points to end at 10,536.27, a 1.7% gain.
What’s driving the market?
Senate Republicans on Monday unveiled a roughly $1 trillion coronavirus relief package, kicking off negotiations with Democrats over a package. A fight looms over supplemental unemployment benefits, with Democrats eager to maintain the existing $600 weekly supplement, while the Republican plan would reduce it to a $200 add-on through September. The supplemental jobless benefits are due to expire at the end of the month.
Democrats and Republicans also want to issue another round of stimulus checks, but disagree on the details.
Analysts said the added jobless benefits have been credited with helping to cushion the blow of the COVID-19 pandemic.
“In our view, for equities to continue yesterday’s rebound, a common ground should be found before Friday when the enhanced unemployment benefits expire,” said Charalambos Pissouros, senior market analyst at JFD Group. Pissouros said a package near $1 trillion or lower would likely come as a disappointment to the market.
Meanwhile, the number of U.S. cases rose to 4.29 million and the death toll hit 148,056. Texas became the fourth state with more than 400,000 cases, joining California, Florida and New York. The global tally for confirmed cases of COVID-19 climbed to 16.5 million on Tuesday, according to data aggregated by Johns Hopkins University, while the death toll rose to 654,327.
Earnings reports were rolling in or were due from a number of high-profile companies, including 3M Co. MMM, +2.12%, Pfizer Inc. PFE, -0.31% and McDonald’s Corp. MCD, +1.27% ahead of the opening bell in the busiest week of earnings season.
The Federal Reserve will begin a two-day policy meeting Tuesday that’s unlikely to result in much action, but is expected to see Chairman Jerome Powell underline a willingness to take further action to support the economy and maintain easy financial conditions.
The economic calendar features the Case-Shiller home price index for May at 9 a.m. Eastern, while a reading on consumer confidence for July is due at 10 a.m. Eastern.
Which companies are in focus?
- Pfizer Inc. shares were up more than 3% in premarket trade after beating earnings and revenue expectations and raising its full-year outlook.
- 3M Co. shares fell more than 2% in premarket action after the diversified maker of health care, consumer and industrial products reported second-quarter profit and revenue that came in below expectations, with results “significantly impacted” by the COVID-19 pandemic.
- Shares of McDonald’s Corp. slumped more than 3% ahead of the bell after the fast-food chain reported earnings that fell short of Wall Street forecasts.
- Raytheon Technologies Corp. RTX, -1.57% shares were higher in premarket action after it beat both earnings and revenue forecasts.
How are other markets trading?
In Asia, China’s CSI 300 gauge 000300, +0.87% rose 0.9%, the Shanghai Composite SHCOMP, +0.70% gained 0.7%, Hong Kong’s Hang Seng Index HSI, +0.68% rose 0.7% and Japan’s Nikkei 225 NIK, -0.25% advanced 0.3%.
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, 0.610% was up 0.8 basis point at 0.611%. Yields move in the opposite direction of prices.