Stock futures were lower in overnight trading following a decline in the Dow Jones Industrial Average, which snapped a three-day winning streak.
Futures Movement:
Dow futures dipped by 99 points, or 0.23%.
S&P 500 futures fell by 0.24%.
Nasdaq-100 futures decreased by 0.29%.
During Monday’s trading session, the Dow fell over 344 points, or 0.8%, while the S&P 500 declined by about 0.2%. In contrast, the Nasdaq Composite added nearly 0.3%. Additionally, the yield on the 10-year Treasury note surged almost 12 basis points to reach 4.19%.
Earnings Season Focus
Investor attention is squarely on the third-quarter earnings season, with approximately one-fifth of the S&P 500 companies expected to report results this week. Notably, Zions Bancorporation saw a rise of about 3% in after-hours trading following strong earnings, and SAP SE climbed nearly 4% after raising its guidance.
So far, about 14% of companies in the S&P 500 have reported earnings, with more than 70% surpassing analysts’ expectations, according to FactSet.
Concerns About Corporate Expectations
Despite the positive earnings surprises, some analysts on Wall Street express concerns that corporate earnings expectations may be set too high. Megan Horneman, chief investment officer at Verdence Capital Advisors, suggested that while analysts are becoming more realistic about 2025 earnings growth, the current forecast of 15% growth appears overly optimistic given anticipated slower economic growth.
Horneman noted, “It is good to see analysts getting realistic about 2025 earnings growth; however, we believe it is still too optimistic given the expectation for slower economic growth in 2025.” She emphasized that commentary on interest rates, inflation, and economic outlook will be critical for investors throughout the earnings season.
Upcoming Reports
The earnings reporting period is set to ramp up Tuesday, with results expected from notable companies such as 3M, Lockheed Martin, General Motors, and Verizon. Later in the week, investors will also be looking for updates from Tesla, IBM, and Boeing.
