Wall Street is set for a modestly positive opening on Tuesday as investors eagerly await the release of a slew of corporate earnings reports. Futures for the Dow Jones Industrial Average have risen by 0.1% ahead of the opening bell, while S&P 500 futures have gained 0.2%.
General Motors has kicked off the earnings season with a strong performance, reporting a 25% increase in first-quarter net income on the back of robust pickup truck and higher-profit vehicle sales. Despite a slight decline in overall U.S. auto sales, GM surpassed Wall Street’s profit forecasts and issued an optimistic full-year earnings outlook.
PepsiCo’s shares, however, have remained unchanged in pre-market trading despite reporting better-than-expected first-quarter revenue driven by international demand for its snacks and beverages.
JetBlue, on the other hand, has seen its stock price tumble by over 10% after announcing a decline in sales and lowering its revenue outlook for the year.
Tesla, the electric car manufacturer that has faced a 43% stock decline this year, is scheduled to release its first-quarter financial results after the market closes. The Elon Musk-led automaker has been forced to cut prices on its vehicles multiple times this year due to weakening demand.
Approximately one-third of the companies in the S&P 500 are set to report their first-quarter earnings this week, including tech giants Tesla and Alphabet. Companies are under immense pressure to demonstrate strong profit and revenue growth, especially considering that interest rates, another key factor influencing stock prices, are unlikely to provide much support in the near term.
The Federal Reserve’s recent indications that it may maintain high interest rates to curb inflation have disappointed financial markets, dampening hopes for potential rate cuts this year. This has increased the onus on companies to deliver exceptional performance.
Meanwhile, in Europe, London’s FTSE 100 hit a record high early Tuesday, briefly surpassing its peak reached in February 2023. Germany’s DAX and France’s CAC 40 also opened with gains.
In Asia, Japan’s Nikkei 225 index rose moderately, although manufacturing activity in the country has contracted for 11 consecutive months. Hong Kong’s Hang Seng index climbed by 1.9%, while China’s Shanghai Composite index edged down slightly.
U.S. benchmark crude oil prices have retreated slightly, while the U.S. dollar has weakened against the Japanese yen. The euro has gained some ground against the dollar.
On Monday, U.S. stocks rebounded, with the S&P 500 gaining 0.5%, the Dow Jones Industrial Average rising by 0.7%, and the Nasdaq composite jumping by 1.1%.
