US stock futures fell on Tuesday, setting up for more losses as investors looked to big retailer earnings to provide insight into consumer resilience amid doubts about the odds of a “soft landing“.
Futures on the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) futures slipped around 0.4% to kick off a holiday-shortened week. Contracts on the tech-heavy Nasdaq 100 (^NDX) dropped roughly 0.6% after the three gauges closed a turbulent week lower.
Earnings are front of mind as markets reopen after the Presidents’ Day shutdown, with quarterly reports from leading US retailers Walmart (WMT) and Home Depot (HD) on the docket. Shares of Home Depot dipped after it signaled demand has failed to pick up amid “sticky” inflation.
Walmart’s results are seen as a bellwether of consumer spending, and investors are watching closely for clues to the health of the US economy after last week’s retail sales and inflation surprises.
The recent data has challenged the idea the economy is headed for a future where inflation falls to the Federal Reserve’s 2% target without a severe downturn, prompting a pullback in bets on a spring interest-rate cut.
Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards
Looming large are Wednesday’s earnings from Nvidia (NVDA), seen as a potential turning point for markets. With just a handful of megacap stocks driving the lion’s shares of gains. any shortfall amid high hopes for the AI-focused chipmaker — the third-biggest company by market value — risks a pullback for stocks more broadly.
In corporate news, Discover Financial Services (DFS) shares popped almost 13% in premarket trading on news that Warren Buffett-backed Capital One (COF) plans to buy the credit card issuer in a $35 billion deal that would create the sixth-largest US bank by assets.
Elsewhere, and adding to the muted mood, China’s central bank cut its key mortgage rate by a record amount in a bid to halt a worsening property crisis.