US Stock Futures Rise as Bond Yields Fall; Tech Earnings in Focus
US Stock Futures Edge Higher as Bond Yields Retreat
US stock futures are showing a positive trend as bond yields retreat ahead of the release of quarterly earnings from major tech companies. This development has sparked optimism among investors and is expected to have a positive impact on the market.
At 06:20 ET (10:20 GMT), the stock market shows promising signs. The contract has increased by 115 points, or 0.4%, while the traded 20 points, or 0.5%, higher. Additionally, the climbed 95 points, or 0.6%, adding to the positive sentiment.
Yields Fall Back, Easing Pressure on Stocks
The recent performance of Wall Street indices has been mixed, with the benchmark initially crossing the closely followed 5% level before falling back. While the broad-based fell 0.2% and the blue-chip dropped 0.6%, the tech-heavy experienced a rise of 0.3%. The decline in the benchmark 10-year Treasury yield to 4.835% has provided some relief to the highly-leveraged tech sector, reducing the pressure on stocks.
Top Earnings Slated for Microsoft and Alphabet
The ongoing earnings season is gaining momentum, with approximately 30% of S&P 500 companies expected to report their quarterly earnings. Today’s highlight is the release of earnings from tech giants Microsoft and Alphabet after the closing bell. Additionally, companies like Coca-Cola, Spotify, and General Motors will also be revealing their performance numbers. According to FactSet, 75% of the 17% of S&P 500 companies that have already reported earnings have exceeded analysts’ expectations.
US Composite PMI Likely to Slow in October
Investors are closely watching the release of flash US PMIs, which will provide insights into the economic situation ahead of the Federal Reserve’s policy-setting meeting next week. The September PMI reading of 50.2 indicated stagnant economic growth, and with the recent rise in crude prices, growth may slow as we enter the fourth quarter. Europe’s PMI also paints a gloomy picture, with a decline to 46.5 in October from 47.2 in the previous month. This is the lowest reading since November 2020 and the weakest since March 2013, excluding months affected by the COVID-19 pandemic.
Oil Bounces Amid Gaza Diplomacy
Crude prices have rebounded after Monday’s sharp losses. The ongoing Israel-Hamas conflict and the potential for a wider conflict in the oil-exporting region have been key factors influencing the market. As of 06:20 ET, the futures have risen by 0.5% to $85.94 a barrel, while the contract has climbed 0.5% to $90.31 a barrel. The recent diplomatic efforts and the release of some hostages by Hamas have provided some hope for deescalation, but the situation remains uncertain, with the possibility of further escalation.
The American Petroleum Institute (API) is scheduled to release its latest estimate of US inventories, which is expected to show a rise in crude stockpiles, while distillate and gasoline inventories are anticipated to have fallen. The official data from the US Energy Information Administration (EIA) will be released on Wednesday.