Investing.com Market Update

Dow and Nasdaq Futures Decline Ahead of Earnings Reports
Dow futures and Nasdaq futures inched down on Tuesday as investors braced for a wave of quarterly earnings from major companies.

Texas Instruments (NASDAQ:TXN) is among those reporting, with market watchers eager for insights on semiconductor demand amid rising enthusiasm for artificial intelligence. Additionally, four Federal Reserve officials have shown support for further interest rate cuts, but their opinions on the timing of these cuts vary.

1. Futures Mostly Lower

US stock futures are generally lower as the market anticipates a range of corporate earnings reports.
– By 03:30 ET (07:30 GMT), Dow futures fell 82 points (0.2%), S&P 500 futures were stable, while Nasdaq 100 futures dropped 44 points (0.2%).
– The Nasdaq Composite had previously rallied, buoyed by gains in tech giants, including Nvidia (NASDAQ:NVDA). The Dow Jones and S&P 500 both retreated from recent record highs as investors weigh valuations against upcoming earnings results.
– Meanwhile, the 10-year US Treasury yield reached a 12-week high, exacerbating equity valuation issues, prompting analysts at Vital Knowledge to suggest profit-taking may be in order due to a combination of rising yields and elevated earnings expectations.

2. Texas Instruments to Report

Corporate earnings reports are set to gain momentum on Tuesday.
– Other companies reporting include GE Aerospace, Danaher Corporation (NYSE:DHR), Philip Morris International (NYSE:PM), and Verizon Communications (NYSE:VZ).
– Texas Instruments' performance will be closely monitored as it may provide direction on chip demand in the current AI boom.
– Although chip shares experienced a drop after ASML (AS:ASML) forecasted lower 2025 sales, Taiwan Semiconductor Manufacturing Co. reported a remarkable 54% profit increase, boosting market sentiment in the sector.

3. IMF's Updated Global Economic Outlook Ahead

The International Monetary Fund (IMF) is expected to revise its global economic forecast on Tuesday.
– Previously, the IMF anticipated slow but steady worldwide growth this year, supported by the US despite slower activity in China and Europe.
– Current projections for global GDP growth remain at 3.2% for 2024 and 2025. IMF Managing Director Kristalina Georgieva expects to exceed a 3% growth forecast, but higher prices are anticipated to persist.
– The IMF also indicated that global public debt is likely to exceed $100 trillion, primarily driven by the US and China, causing potential market volatility.

4. Four Fed Officials Back Rate Cuts

On Monday, four Federal Reserve officials endorsed additional interest rate reductions following a significant 50 basis point cut in September.
– While they agreed on the need for cuts, there was disagreement on the pace of reductions.
– Three officials supported a gradual approach due to an uncertain outlook, whereas San Francisco Fed President Mary Daly argued for maintaining a flexible stance.
– Following Friday, a blackout period will restrict Fed officials from commenting on monetary policy until November 7.

5. Crude Slips

Oil prices fell on Tuesday as concerns over global demand emerged, particularly regarding China.
– By 03:29 ET, Brent crude fell by 0.7% to $73.77 per barrel, while US WTI dropped to $69.53 per barrel.
– IEA's head, Fatih Birol, indicated that ongoing economic challenges in China would suppress global oil demand for years.
– Additionally, tensions in the Middle East remain a concern ahead of US Secretary of State Antony Blinken’s discussions to de-escalate the ongoing conflict impacting crude prices.

(Reuters contributed reporting.)