The S&P 500 opened flat as investors looked to big tech gains for more clues about the health of the US economy.
Futures linked to the Dow Jones Industrial Average fell 76 points, or 0.2%. S&P 500 futures were flat, while Nasdaq 100 futures rose 0.3%.
Amazon shares fell slightly in premarket trading on reports of a hiring freeze. JetBlue and Xerox were among the stocks that fell before the bell after reporting earnings that missed expectations. Coca-Cola and General Motors were among those that jumped with better-than-expected reports.
Tuesday’s moves came after another strong day for stocks.
The Dow rose 417.06 points, or 1.3%, on Monday. The Nasdaq Composite finished 0.9% higher and the S&P 500 added about 1.2%, with nine of the 11 sectors finishing higher, led by health care.
“The market has become accustomed to real price volatility, almost desensitized,” said Jeff O’Connor, head of market structure in the Americas at Liquidnet. “And the wild moves are making trading conditions much more difficult.”
Investors this week remain focused on the earnings of the biggest tech companies, with reports from Alphabet and Microsoft starting on Tuesday. Meta Platforms reports on Wednesday, followed by Amazon and Apple on Thursday. Given its large size and market cap, any move is likely to propel the market forward.
So far this season, the companies have shown they can be better than expected. That’s partly because analysts’ earnings estimates have fallen in recent months as companies faced headwinds and other growth concerns. This could set up actions for demonstrations with potentially better results than feared.
“Earnings have really come down quite a bit,” said Sam Stovall, chief investment strategist at CFRA. “Maybe investors are happy that it’s up 2% and not down 2%, but we’ve also been seeing reductions in forecasts to 2023. This bear market is likely to develop even if we get a near-term bear market rally.”
UPS, GE, Coca-Cola all reported earnings before the bell on Tuesday. Chipotle Mexican Grill and Texas Instruments will report after the close on Tuesday.
On the economic side, S&P/Case-Shiller August home prices, FHFA August home prices and October consumer confidence are scheduled for Tuesday.