U.S. stock-index futures rose Tuesday, lifted by growing expectations the worst of the COVID-19 pandemic may have passed, as a first-quarter corporate earnings reporting season kicks off that will see results and outlooks hammered by the economic shutdown that’s resulted from the disease.
What are the major indexes doing?
Futures on the Dow Jones Industrial Average YM00, +1.66% rose 321 points, or 1.2%, to 23,598, while S&P 500 futures ES00, +1.63% rose 32.3 points, or 1% to 2,791. Nasdaq-100 futures NQ00, +1.87% were up 116 points, or 1.3% at 8,443.
Stocks ended mostly lower Monday, with the Dow Jones Industrial Average DJIA, -1.38% down 328.60 points, or 1.4%, at 23,390.77, while the S&P 500 SPX, -1.01% dropped 28.19 points, or 1%, to close at 2,761.63. The Nasdaq Composite COMP, +0.47% turned positive in late trade, gaining 38.85 points, or 0.5%, to end at 8,192.42, its third straight session of gains.
What’s driving the market?
Signs the spread of the virus has peaked in Europe and is leveling off in the U.S. provided a lift to global equities on Tuesday as authorities around the world prepare plans to ease restrictions and reopen businesses as soon as possible, analysts said.
Hopes for progress on a vaccine are also serving to boost optimism, said Raffi Boyadjian, senior market analyst at XM, particularly given warnings by health officials that a premature lifting of lockdowns could spark another wave of infections.
Meanwhile, earnings season could provide an important test for a market that has rebounded sharply from the March 23 lows in the S&P 500 index set as stocks plunged in response to the crisis.
For the first quarter, 88 negative earnings pre-announcements have been issued by S&P 500 index companies and earnings are expected to fall 10.2%, according to Refinitiv.
“Given the unprecedented nature of this crisis, analysts’ estimates could easily miss by a wide margin, raising the prospect of a very volatile few weeks for share prices,” Boyadjian said, in a note. “It is possible, of course, that the flood of government and central bank stimulus, as well as expectations that the global shutdowns will end soon could be enough to keep risk appetite afloat as big multinationals reveal the staggering cost of the virus disruptions on their earnings.”
Upbeat data out of China also lifted appetite for equities, analysts said. China’s exports and imports in March continued to drop, but at a slower rate, as the country’s economic activity began to recover from the measures enacted to prevent the spread of coronavirus.
Which companies are in focus?
- Shares of JPMorgan Chase & Co. JPM, -4.44% were up 1.3% in premarket trade after the bank reported first-quarter profit and revenue that missed expectations, but beat on net interest income and saw strong growth in equity and fixed-income markets revenue.
- Johnson & Johnson JNJ, -1.03% shares were up more than 3% in premarket action after the drug and consumer products company reported first-quarter profit and sales that topped expectations and boosted its dividend, offsetting a downbeat full-year outlook.
- Wells Fargo & Co. shares were trading 0.6% in the premarket, ahead of its earnings release.
How are other markets trading?
Government bonds were trading largely unchanged, with the yield on the 10-year U.S. Treasury TMUBMUSD10Y, 0.741% holding at around 0.75%.
Crude oil prices were trading lower. West Texas Intermediate Crude for May delivery CLK20, -3.48% fell 51 cents, or 2.2% to trade at $21.90 on the New York Mercantile Exchange. In precious metals, the price of an ounce of June gold GCM20, +0.36% slid $2.30, or 0.2% to $1,758.
The U.S. dollar fell 0.2% relative to a basket of its peers, according to the U.S. dollar index DXY, -0.27% .
In Europe. stocks were trading mixed, with the Stoxx Europe 600 SXXP, +0.82% up 0.8% and the FTSE 100 UKX, -0.35% down 0.5%.
In Asia overnight, stocks rallied — the China CSI 300 000300, +1.93% gained 1.9%, Japan’s Nikkei 225 NIK, +3.12% gained 3.1% and Hong Kong’s Hang Seng index HSI, +0.55% rose 0.6%.
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