Futures mixed; Bank of America, Goldman Sachs to report - what's moving markets

Published 15/10/2024, 08:48
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Investing.com -- US stock futures hovered around both sides of the flatline as markets waited for cues from fresh company earnings and economic indicators. Wall Street banking giants Bank of America and Goldman Sachs are due to highlight the slate of quarterly returns. Meanwhile, shares in Nvidia (NASDAQ:NVDA) touch a new record high, bringing the artificial intelligence chipmaker's market capitalization closer to tech behemoth Apple (NASDAQ:AAPL), the world's most valuable company.

1. Futures mixed

US stock futures were mixed on Tuesday, with investors looking ahead to a raft of quarterly corporate earnings reports and key economic data.

By 03:30 ET (07:30 GMT), the S&P 500 futures contract was mostly unchanged, Dow futures had edged up by 52 points or 0.1%, and Nasdaq 100 futures had dipped by 11 points or 0.1%.

The benchmark S&P 500 and the 30-stock Dow Jones Industrial Average both logged record high finishes on Monday following a trading day that was relatively subdued because of the closure of bond markets for a federal holiday.

A jump in artificial intelligence-darling Nvidia's stock price to a new all-time closing peak also helped push up the tech-heavy Nasdaq Composite by 160 points or 0.9% (more below).

2. Wall Street banking giants to report

A slew of quarterly results from some of corporate America's biggest names are due out on Tuesday, including numbers from Wall Street giants Bank of America, Goldman Sachs and Citigroup.

Markets will be keen to see how these returns factor into the outlook for the financial services sector heading into the final three months of 2024 -- and an anticipated easing cycle by the Federal Reserve.

On Friday, the KBW bank index, a tracker of 24 of the biggest US lenders, climbed to its highest level since before the failure of Silicon Valley Bank in 2022 thanks to stronger-than-estimated income from JPMorgan Chase (NYSE:JPM) and Wells Fargo.

Underpinning the increase were hopes that the US was on track for a so-called "soft landing," in which the Fed manages to tame sky-high inflation without sparking a broader downturn in the economy. The central bank, which hiked interest rates aggressively starting in 2022 in a bid to quell price growth, slashed borrowing costs by an outsized 50 basis points at its gathering in September to support economic activity and the labor market.

JPMorgan CFO Jeremy Barnum said that any indications of a slowdown in consumer spending are within "the realm of what is normal", while Wells Fargo CEO Charlie Scharf noted the bank is seeing no signs of a shift in the health of American shoppers.

3. Nvidia shares notch record high

Shares in AI chipmaker Nvidia rose by 2.4% on Monday to $138.07, bumping up its market capitalization to $3.39 trillion.

The uptick brings Santa Clara, California-based Nvidia, whose AI-optimized processors have made the business one of the focal points of soaring enthusiasm around the nascent technology, closer to replacing iPhone-maker Apple as the world's most valuable company. Apple's market cap stands at $3.52 trillion.

Nvidia, which temporarily held the crown as the world's most valuable group in June before being unseated by software titan Microsoft (NASDAQ:MSFT), has said that customers are continuing to buy its existing line of chips. However, it flagged in August that production of its next-generation Blackwell chips had been delayed until the fourth quarter.

Elsewhere, the Biden administration is considering placing a limit on the sales of AI chips manufactured by Nvidia and peer AMD (NASDAQ:AMD) on a per-country basis, according to a Bloomberg News report.

Officials discussed imposing limited export licenses on some countries, likely cutting off their exposure to advancements in AI technology, the report said. The restrictions are being considered in the interest of national security, and are focused on countries in the Middle East and Persian Gulf.

4. Trump Media shares spike

The stock price of former US President Donald Trump's media group surged on Monday, touching their highest mark in over two months.

Shares in Trump Media and Technology Group (NASDAQ:DJT) have more than doubled in the past two weeks, buoyed in part by an uptick in betting odds that Trump will emerge victorious in the upcoming Nov. 5 presidential election.

Also fueling Monday's jump in Trump Media shares were reports that Kamala Harris -- Trump's Democratic rival for the White House -- had agreed to be interviewed by Fox News. Sentiment was aided as well by Trump Media's announcement that the lossmaking firm would launch its own video streaming service.

5. Oil slumps

Oil prices fell sharply Tuesday, adding to recent losses on growing concerns over a slowdown in demand growth, particularly from top exporter China.

By 03:31 ET, the Brent contract dropped 3.8% to $74.53 per barrel, while U.S. crude futures (WTI) traded 3.9% lower at $70.94 a barrel.

Both benchmarks had settled about 2% lower on Monday, and have continued to retreat after China logged a fifth straight monthly decline in oil imports, spurring fears of weak demand.

These fears were exacerbated by the Organization of the Petroleum Exporting Countries cutting its oil demand outlook for a third consecutive month.

Oil prices were also dented by traders pricing out a risk premium after a report on Monday said Israel will not attack Iran’s oil and nuclear facilities. Such a strike would have marked a major escalation in the conflict, and had investors concerned about a disruption to supply from this oil-rich region.

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