US Futures Flat After Another Record Run for Stocks

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Key Takeaways

• Wall Street stocks advanced on Monday, building on records set Friday
• Futures tied to major benchmarks hover moderately lower on Tuesday

Stocks on Wall Street climbed higher to start the week as earnings expectations boosted the positive market sentiment. Major indexes continued their upside swing from Friday and ended Monday’s session at new highs.

Stocks across the board gained yesterday amid a broad-based rally that saw nine of the 11 S&P500 sectors move higher. Financial stocks and shares tied to the economic reopening were among the best performers as they will be the first to reveal their financial results for the second quarter this week.

The S&P500 advanced 15.08 points, or 0.35%, to 4,384.63, its 39th record close of the year. The Nasdaq Composite pushed higher by 31.32 points, or 0.21%, to finish in record territory at 14,733.24. The Dow Jones Industrial Average gained 126.02 points, or 0.36%, to 34,996.18.

US future wavers ahead of the opening bell on Tuesday with all three stock gauges just below the flatline.

Earnings season kicks off Tuesday with top US investment banks reporting today. Investors will be looking to see if the biggest lenders could justify their record high valuations, coupled with even higher profit expectations.

Analysts Anticipate Positive Statements

JPMorgan and Goldman Sachs, two behemoth investment firms, report their quarterly earnings today. Analysts expect the financial statements for banking firms to be particularly impressive due to the economic reopening in the second trimester that has allowed the pent-up demand to spread across a variety of economic sectors.

In general, the consensus for these quarterly results is that S&P500 profits would be over 63% higher than a year earlier. If materialized, the growth would be the highest since the financial crisis in 2008-09.

Still, the market remains jittery some days as money managers indicate worries about a potential slowdown in growth, high inflation expectations, or the spread of the Delta variant of coronavirus.

These headwinds for stocks, among other topics, would be discussed today by Fed Chair Jay Powell during his appearance before Congress. A two-day semiannual report will include Mr. Powell’s remarks on the economic pace of recovery threatened by a surge in prices. His testimony is expected to highlight how and when the Federal Reserve intends to scale back its monetary support.

In prior statements, Jay Powell has vowed that the current stance will remain intact until “substantial further progress” is made toward reaching Fed’s goals, namely maximum employment and stable prices.

Moreover, inflation data today will be used to gauge the temperature of the economic expansion in the US.

In overseas market trading, European bourses opened Tuesday’s session fairly flat and seeking direction. On Monday, the pan-continental Europe Stoxx 600 closed at a new record by gaining 0.69% to finish the session at 460.83.

While shares in Europe get into their stride today, bitcoin is trading higher by 1.5% on the day. The cryptocurrency market has been rather muted this month with Bitcoin hovering between $33,000 and $35,000 per coin.

Gold is turning higher on the day, continuing its strong performance for the month. For the past couple of weeks, the precious metal has experienced only two mildly negative trading sessions. Gold boasts a 2.5% gain month-to-date as it’s currently floating around $1,810 per troy ounce.