Stock futures tumble as investors wait for earnings season to kick off

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U.S. equity futures fell slightly in overnight trading on Tuesday as investors waited for the first batch of corporate earnings and updates on a stimulus package.Dow futures fell 90 points. S&P 500 futures fell 0.05% and Nasdaq 100 futures fell 0.05%.

Futures improved as Disney rose more than 5% after-hours trading after announcing a major reorganization of the business with streaming at the forefront of its business. Disney said it is centralizing its media activities into a single organization that will be responsible for content distribution, ad sales and Disney +.

The third quarter earnings season kicks off Tuesday with several major banks expected to report results, including JPMorgan Chase, Citigroup and Delta Air Lines. Third quarter results are expected to decline significantly; however, traders are hoping for an upside surprise.

Investors switched from cyclicals to tech names on Monday after small updates on a tax assistance program were revealed. The Dow Jones Industrial Average climbed 250 points and the S&P 500 gained 1.64%, both helped by a 6.4% jump in Apple stock.

Apple’s long-awaited iPhone launch, which has been delayed until October due to Covid-19, takes place on Tuesday and the company is expected to launch its very first 5G iPhone. It will be “the biggest iPhone event in years,” Morgan Stanley’s Katy Huberty told clients.

With technology stocks in the lead, the Nasdaq Composite gained 2.56% on Tuesday, its best day since September 9.

Investors have also weighed the possibility of a second Washington coronavirus relief program. Over the weekend, the Trump administration called on Congress to pass a $ 1.8 billion coronavirus relief bill, as negotiations on a larger package continue to face obstacles . However, House Speaker Nancy Pelosi in a letter to her colleagues said the proposal contained insufficient offers on health issues.

“It doesn’t seem like a ‘stimulus’ anymore,” Jim Paulsen, chief investment strategist at Leuthold Group, told CNBC. The S&P 500 Index rebounded near its all-time highs today on the back of growth – the technology, communications and consumer discretionary sectors. ”

“Recently, the stock market has risen, whether the news surrounding a further stimulus package is good or bad, suggesting that stocks are already reacting to what will likely be a wonderful quarterly earnings season,” Paulsen added.

BlackRock and Johnson & Johnson are also releasing quarterly results ahead of the bell Tuesday.

Amazon’s Prime Day begins Tuesday, and the two-day event could mark the biggest online shopping day of the year, according to NPD, with 57% of consumers planning to do some if not all of their shopping. vacation this week.

The Department of Labor will release the September Consumer Price Index at 8:30 a.m. ET on Tuesday. Economists polled by FactSet expect prices to rise 0.2%. The price rose 0.4% in August, helped by increases in the cost of gasoline.

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