ReElement Technologies stock soars after securing $1.4B government deal
Investing.com - U.S. stock futures are subdued as a busy week filled with big-name earnings reports, central bank interest rate decisions, and high-level trade negotiations picks up the pace. President Donald Trump is in Japan in the latest leg of an Asian tour, with hopes high that the visit will culminate with a trade deal with China following a summit with the country’s leader in South Korea on Thursday. UnitedHealth’s turnaround push will likely be in focus when the health insurer unveils its quarterly results, while Amazon is reportedly planning to axe tens of thousands of corporate jobs and gold extends its recent retreat.
1. Futures muted
U.S. stock futures traded around the flatline on Tuesday, as investors geared up for a bevy of corporate earnings and eyed the chances of a trade deal between the United States and China.
By 03:50 ET (08:50 GMT), the Dow futures contract and Nasdaq 100 futures were both unchanged, while S&P 500 futures slipped by 4 points, or 0.1%.
The main averages on Wall Street notched an all-time high record close for the second consecutive session on Monday, with hopes rising that the planned meeting of Presidents Donald Trump and Xi Jinping this week will yield a sustainable cooling in tariff-fueled U.S.-China tensions.
Markets cheered expectations that an agreement would avert triple-digit U.S. import tariffs and yield a pause in Chinese export controls on crucial rare earth materials, with the so-called VIX "fear gauge" slumping to about a one-month low.
In individual stocks, shares of Qualcomm spiked by 11% after the chipmaker said it will release two AI processors for data centers starting next year.
2. Trump in Japan
Before the anticipated summit with Xi, Trump has been on a whirlwind, multi-day trip through a clutch of Asian countries.
On Tuesday, the president has been in Japan, where he has met with the nation’s newly-elected Prime Minister Sanae Takaichi, a protegee of former premier and Trump’s late friend, Shinzo Abe.
Trump and Takaichi inked a framework agreemet for securing rare earth supplies, in a bid to bring down international reliance on China for minerals vital in industries ranging from electric vehicles to semiconductors. However, no explicit mention of China, the dominant player in the worldwide rare earth sector, was made by either leader.
There were few details around Japan’s intentions for a pledged $550 billion investment in the U.S., which was part of a broader bilateral trade package earlier this year. According to Reuters, under the deal, Japan was expected to offer the White House investments in shipbuilding and vow to purchase U.S. soybeans, gas and pickup trucks.
3. UnitedHealth headlines earnings slate
Attention now turns to a host of corporate results, as a stream of returns due out this week intensifies.
UnitedHealth Group has lifted its annual adjusted income per share forecast, citing quarterly earnings which topped Wall Street expectations, as CEO Stephen Hemsley aims to reposition the health insurer for "durable and accelerating growth" next year.
The firm, which has been grappling with increased costs, posted a medical care ratio of 89.9%, below Bloomberg consensus projections of 90.7%. The metric gauges the percentage of an insurer’s premium revenue spent on medical claims and quality improvement activities. A higher figure indicates that more premium revenue is being used for patient care.
Partly buoyed by the lower-than-expected expenses, third-quarter adjusted per-share profit came in at $2.92, versus estimates of $2.83. Consolidated revenues were up 12% against a year ago to $113.2 billion, compared to expectations of $113.03 billion.
UnitedHealth subsequently raised its annual adjusted net income per share estimate to at least $16.25, up from its previous outlook of at least $16.
Shares of UnitedHealth climbed by more than 4% in premarket U.S. trading following the announcement.
Following the close of trading on Wall Street, the earnings docket includes figures from credit card firm Visa and online travel agent Booking Holdings. Later this week, numbers will be out from mega-cap tech giants like Google-owner Alphabet, Facebook-parent Meta Platforms, and e-commerce behemoth Amazon.
4. Amazon plans as many as 30,000 job cuts - Reuters
Ahead of the results, Amazon is eyeing deep job cuts at its corporate operations starting on Tuesday, in an attempt to pare back expenses and correct for overhiring during the pandemic, according to Reuters.
Citing people familiar with the matter, the news agency said as many as 30,000 of these roles will be slashed, a relatively small percentage of Amazon’s mammoth global workforce but almost 10% of its corporate employees. It would be Amazon’s largest job reduction drive since 2022, when it eliminated about 27,000 positions.
Email notifications to impacted staff members will be sent out beginning Tuesday morning, Reuters said.
Over the last two years, Amazon has been attempting to trim down the size of multiple divisions, such as podcasting, communications and devices, while CEO Andy Jassy has warned that more reductions could be on the way because of the increased use of artificial intelligence tools.
This round of cuts could affect several units, including the Amazon Web Services cloud business, the report said.
5. Gold slips
Gold prices retreated further on Tuesday after slumping below $4,000 per ounce in the previous session, as signs of easing U.S.-China trade tensions reduced bullion’s safe-haven appeal ahead of a closely-watched Federal Reserve meeting.
Spot gold was last down 1.6% at $3,915.67 an ounce, while U.S. gold futures declined 2.3% to $3,928.26/oz.
The yellow metal slipped over 3% to an over-two-week low on Monday. Prices have fallen about 10% from the record high of $4,381.29/oz reached just a week earlier.
"Even after [Monday’s] correction, gold is still up more than 50% this year, underpinned by strong ETF demand and central bank buying amid diversification," ING analysts said in a recent note.
"The recent price pullback could even be seen by some central banks as a chance to increase their holdings," they added.
Investors are now focused on the two-day Fed gathering, which begins later today and is expected to end on Wednesday with a 25 basis-point rate cut. While lower rates would typically boost gold by reducing real yields, much of the cut appears priced in, leaving limited upside for the metal in the near term.