US stock futures were mixed on Tuesday as investors prepared for inflation data, major bank earnings and Federal Reserve commentary, while another surge in oil revived fears that the Middle East conflict could prolong the fight against rising prices.
Dow Jones futures fell 141 points, or 0.3%, while S&P 500 futures were little changed. Nasdaq-100 futures outperformed, rising 0.44%.
Wall Street is balancing the prospect of stronger corporate profits against the risk that higher energy costs trigger another round of monetary tightening.
5 things to know before Wall Street opens
1. June inflation may already look dated
The consumer-price index is due at 8:30 am in Washington.
Economists expect annual inflation to ease to about 3.8% from 4.2% in May, helped by lower petrol prices, while core inflation is forecast to remain near 2.9%.
That may offer limited comfort because crude has climbed sharply since the June measurement period.
Investors could focus more on the latest energy shock than on a softer, backward-looking headline reading.
2. Big banks open the earnings season
JPMorgan, Bank of America, Goldman Sachs, Wells Fargo and Citigroup are due to report before the opening bell.
Investors will focus on trading revenue, investment-banking fees, loan growth and signs of stress among consumers and companies.
The results are an early test of whether profits can support the S&P 500’s roughly 10% advance this year.
Strong capital-markets activity could extend the rally, while higher credit provisions would raise questions about the economy’s resilience.
3. Oil returns as Wall Street’s main macro risk
Brent crude climbed above $85 a barrel, its highest level in about a month, after a third consecutive night of US strikes on Iran.
President Donald Trump also said Washington would restore its blockade of Iranian shipping and seek reimbursement equal to 20% of cargo moving through the Strait of Hormuz.
The risk of disrupted flows through a route carrying about a fifth of global oil supplies has pushed inflation back to the centre of the market debate.
4. Warsh faces a congressional test
Fed Chair Kevin Warsh will deliver the semi-annual monetary policy report to the House Financial Services Committee at 10 am.
Investors will watch whether he treats the oil shock as temporary or as a threat to inflation expectations.
Governor Christopher Waller added to the hawkish tone on Monday, arguing that persistently elevated inflation could require tighter policy in the near term.
5. Chip shares attempt a rebound
Nasdaq futures outperformed as semiconductor shares recovered in premarket trading following Monday’s sharp retreat.
The Nasdaq Composite lost 1.6% in the previous session as technology stocks bore the brunt of higher oil prices and rising Treasury yields.
The rebound offers some support to growth shares, but its durability may depend on the CPI reading, bond-market reaction and whether oil extends its advance.
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