US stock futures retreated on Tuesday, setting the Dow up for another downbeat day as investors rethought the outlook for interest-rate cuts and braced for the next wave of earnings reports.
Dow Jones Industrial Average futures (YM=F) fell roughly 0.4%, coming off a hefty closing loss. S&P 500 futures (ES=F) also slid 0.4%, and contracts on the tech-heavy Nasdaq 100 (NQ=F) were down 0.5%.
Stocks are coming under pressure amid growing doubts that the Federal Reserve will continue to cut rates aggressively — or even hold steady in November. Strength in the economy, cautious Fedspeak, and concerns about the fiscal impact of an increasingly expected Trump election win are factors in play.
Amid the uncertainty, the 10-year Treasury yield (^TNX) steadied above 4.2% after Monday’s sharp gains helped push it above that level for first time since July. The bond selling has weighed on rate-sensitive stocks such as real estate, with rising yields typically a catalyst for stock drawdowns.
Despite higher yields, gold (GC=F) prices rose, on track to reclaim Monday’s record high. The gains came as investors sought safety with the US presidential election looming and Middle East tensions still on the rise.
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A host of companies reported third quarter earnings Tuesday morning.
The biggest premarket stock movers were GE Aerospace (GE), Verizon (VZ), 3M (MMM) and Philip Morris (PM). GE Aerospace fell over 5% and Verizon shares fell around 3% on mixed third quarter reports. Paint company Sherwin Williams (SHW) fell 4% after an earnings miss. Lockheed Martin (LMT) and Moody’s (MCO) fell less than 1% despite strong results.
Meanwhile, Philip Morris jumped 3% after raising its guidance thanks to higher cigarette prices as well as its surging smoke-free business. General Motors (GM) rose 1.4% and tech and manufacturing conglomerate 3M jumped 6% after earnings beats.
Here’s more detail about the companies’ performance (expectations according to Bloomberg consensus estimates):
GE Aerospace: Adjusted earnings per share of $1.15 vs. $1.13 expected and revenue totaling $8.9 billion vs. the $9 billion expected,
Philip Morris: Adjusted EPS of $1.91 vs. $1.81 expected, net revenue of $9.9 billion vs. $9.7 billion expected
Verizon: Adjusted EPS of $6.84 vs. $6.44 expected, revenue of $17.1 billion vs. $17.4 billion expected
Moody’s: Adjusted EPS of $3.21 vs. $2.88 expected, revenue of $1.8 billion vs. $1.7 billion expected
Lockheed Martin: Adjusted EPS of $6.84 vs. $6.44 expected, revenue of $17.1 billion vs. $17.4 billion expected
Sherwin Williams: Adjusted EPS of $3.37 vs. $3.53 expected, revenue of $6.16 billion vs. $6.21 billion expected
3M: Adjusted EPS of $1.98 vs. $1.91 expected, revenue of $6.07 billion vs. $6.06 billion expected
General Motors: Adjusted EPS of $2.96 vs. $2.45 expected, revenue of $48.8 billion vs. $44.69 expected
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Economic data: Philadelphia Fed Non-Manufacturing Index (October); Richmond Fed Manufacturing & Business Conditions Index (October)