Wall Street’s eyes are mutedly open as investors weigh earnings; Chips, oil stocks fall

By Lisa Pauline Mattackal and Purvi Agarwal

(Reuters) – Futures pointed to a muted open for major Wall Street indexes on Tuesday, as investors took a breather after a rally in the previous session and analyzed mixed quarterly results from companies including UnitedHealth and Bank of America.

Losses in semiconductor companies and oil stocks also weighed on sentiment, with AI darling Nvidia falling 0.7% in premarket trading after closing at a record on Monday following news that the U.S. is considering restricting exports of advanced chips for artificial intelligence of the company and other companies. The USA is comparable to some countries.

Shares of Advanced Micro Devices fell 1%.

Meanwhile, oil companies slumped: Exxon Mobil and Occidental Petroleum fell 2.7% and 3%, respectively, while crude oil prices fell 4%.

Health insurer UnitedHealth posted a 3.7% decline despite a huge profit hit after reporting a rise in medical costs in the third quarter. Johnson & Johnson also reversed course, falling 1% despite raising its annual profit and sales forecast.

Dow E-minis fell 12 points or 0.03%, US S&P 500 E-minis rose 1.25 points or 0.02%, Nasdaq 100 E-minis rose 0.75 points or were flat.

“There’s really nothing that’s happened so far that would provide good guidance for investors,” said Sam Stovall, chief investment strategist at CFRA Research.

On the bright side, financial stocks gained ground after several major banks reported results, adding to optimism in the industry after a series of reports from institutions like JPMorgan Chase last week kicked off third-quarter earnings season on a bullish note.

Bank of America rose 2% after beating third-quarter profit estimates, Goldman Sachs rose 2.9% as its profit rose on a continued boost from investment banking, while Charles Schwab rose 9, Gained 4% after beating estimates.

“The financial sector is currently experiencing upward revisions to third-quarter earnings estimates, but all that’s happening is that it’s going from a low single-digit gain to a mid-single-digit gain – certainly not knocking the ball out of the park,” said Stovall.

A number of S&P 500 companies will release results later this week that will help investors gauge the health of the U.S. economy. Big companies also need to justify their expensive stock valuations, particularly in the technology sector, where valuations have become increasingly inflated over the past year.

All three major indexes jumped on Monday, with the S&P 500 and Dow Jones hitting record highs for the second day in a row.

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The Dow closed above the 43,000 mark for the first time, while the benchmark S&P 500 is approaching the psychologically significant 6,000 mark.

Boeing rose 1.1% after the planemaker filed to raise up to $25 billion through an equity and debt offering and a $10 billion credit agreement amid a crippling strike and looming debt maturities had completed.

According to CME’s FedWatch, traders expect about an 88% chance that the Fed will cut rates by 25 basis points in November and a slim chance that it will leave rates unchanged.

Speeches from Federal Reserve officials Adriana Kugler, Mary Daly and Raphael Bostic are also scheduled, while economic data including monthly retail sales is expected on Thursday.

(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)