U.S. Stock Markets Pull Back, Large Volume of Third-Quarter Results Expected

Stock index futures, along with U.S. equities, were lower on Tuesday, as attention shifted to the third-quarter results of several large companies.

Most major Wall Street indexes posted slightly negative sessions on Monday, with the Dow Jones index down 0.8%, ending three straight sessions of gains. The S&P 500 index lost 0.2%, while the Nasdaq Composite dropped about 113 points, or 0.6%.

The results of many U.S. companies will be released on Tuesday.

About one-fifth of the S&P 500 index is scheduled to report results this week, and so far, about 14% of the companies in the broad index have reported results, with more than 7 out of 10 beating earnings forecasts, according to FactSet.

Chipmakers Texas Instruments (TXN) and Seagate Technology (STX) will be joined by defense companies GE Aerospace (GE), RTX Corp (RTX), and Lockheed Martin (LMT), as well as telecom Verizon Communications (VZ), miner Freeport-McMoRan (FCX), industrial giant 3M Company (MMM), and automaker General Motors (GM).

Electric car maker Tesla (TSLA) will unveil its results on Wednesday and is the top-ranked company of the week. Other major Wall Street stocks, such as AT&T (T), International Business Machines (IBM), Bank of America (BAC), and Coca-Cola (KO), will also report their results on Wednesday.

Additionally, SAP (SAP) shares rose nearly 4% ahead of the market open after the German software company raised its full-year guidance on the strength of its cloud business in the third quarter, while Zions Bancorporation (ZION) gained nearly 3% following strong earnings.

The International Monetary Fund is expected to update its estimates for the global economy later on Tuesday, and investors will also be on the lookout for more statements from the Federal Reserve, as FOMC member Patrick Harker is scheduled to speak during the session.

On Monday, four Fed policymakers backed further rate cuts following the central bank’s decision to reduce borrowing costs by 50 basis points in September.

However, comments from these officials indicated some ongoing disagreement about the pace of the cuts.

The U.S. presidential election remains in focus, with GOP candidate Donald Trump gaining ground on Vice President Kamala Harris, according to the latest polls, just two weeks before the vote.

Oil prices reversed previous losses on Tuesday, though uncertainty continues to cloud global demand growth, particularly in major crude importer China.

International Energy Agency head Fatih Birol said on Monday that China’s economic weakness would continue to weigh on global oil demand in the coming years.

Birol’s comments, in an interview with Bloomberg, followed recent cuts in demand growth forecasts by both the International Energy Agency and the Organization of the Petroleum Exporting Countries, largely due to concerns about China.

However, tensions in the Middle East continue to support the crude oil market, as traders fear that an escalation of the conflict between Israel, Hamas, and Hezbollah could significantly impact supply in the oil-rich region.