U.S. stock futures declined following Meta Platforms’ weak quarterly results and guidance, as well as disappointing revenue from International Business Machines. The S&P 500 and Nasdaq Composite saw modest gains amid rising Treasury yields. Traders are anticipating key economic data release including the U.S. gross domestic product, weekly jobless claims, and personal consumption expenditures index, which will influence the Federal Reserve’s interest rate policy decisions. Fed funds futures suggest a potential rate cut in September, but strong earnings may continue to support stocks despite uncertainties.
Chief investment strategist Anastasia Amoroso believes that even if the Fed maintains interest rates, strong earnings could bolster the stock market. Return expectations for investors have improved since April, indicating optimism. Companies such as Caterpillar, Honeywell, Northrop Grumman, American Airlines, Comcast, Merck, and Bristol-Myers Squibb are set to report earnings before Thursday’s opening bell. Comcast, the parent company of CNBC, is included in the list of companies disclosing earnings.
In extended trading, Meta Platforms saw a 15% drop after issuing lower-than-expected second-quarter revenue guidance. In addition, International Business Machines fell 8% after missing consensus estimates for first-quarter revenue figures. Overall, the stock market had a mixed day with the S&P 500 and Nasdaq Composite making slight gains, while the Dow Jones Industrial Average experienced a small decline. Traders are closely watching the upcoming economic data releases and their impact on the Federal Reserve’s interest rate policies.
The release of key economic data, including the U.S. GDP, weekly jobless claims, and personal consumption expenditures index, will shape the Federal Reserve’s decisions on interest rates. Economists expect a real GDP of 2.4% for the first quarter and forecast a monthly increase of 0.3% and a year-on-year jump of 2.6% in the personal consumption expenditures index for March. Fed funds futures anticipate a potential rate cut at the September Fed meeting, according to the CME FedWatch Tool, based on the data.
Despite uncertainties surrounding interest rate policies, strong earnings may continue to support stocks and boost investor confidence. Companies reporting earnings before Thursday’s opening bell include a mix of industries such as manufacturing, aviation, pharmaceuticals, and media. Comcast, the parent company of CNBC, is among the listed companies set to disclose earnings. Traders will closely monitor these earnings reports and economic data releases to assess the overall market trends and potential impact on stock prices and investor sentiment.
