Futures pause after rally, JPMorgan results draw cheer

Futures pause after rally, JPMorgan results draw cheer

(Reuters) – U.S. stock index futures were flat to slightly lower on Tuesday, as investors took a breather following a record rally, even as JPMorgan’s quarterly results set a positive tone for big bank earnings.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 13, 2020. REUTERS/Brendan McDermid

The S&P 500 and the Nasdaq indexes set new all-time highs on Monday, helped by bets that the expected Phase 1 U.S.-China trade deal will spur a rebound in global growth and on easing Middle East tensions.

JPMorgan Chase & Co (JPM.N), the largest U.S. bank by assets, rose 1.7% in pre-market trading after its fourth-quarter profit beat Wall Street estimates, driven by strength in its trading business and higher underwriting fees.

Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N), also set to report results before market open, rose about 0.8% each.

Analysts expect profits at S&P 500 companies to drop 0.7% for the second consecutive quarter, according to Refinitiv IBES data, largely due to weakness in earnings for energy and industrial companies that have been hit by a prolonged trade war.

China has pledged to buy nearly an additional $80 billion of manufactured goods from the United States over the next two years, plus over $50 billion more in energy supplies, Reuters reported, citing a source briefed on the trade deal expected to be signed on Wednesday.

As the earnings season starts in earnest, investors are hopeful that a resolution to the Sino-U.S. trade war would encourage companies to come up with stronger forecasts.

Delta Air Lines Inc (DAL.N) jumped 4.4% after reporting a better-than-expected quarterly profit, boosted by customers gained from rival airlines’ 737 MAX cancellations.

High-flying stocks Apple Inc APPL.O, Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O) and Facebook Inc (FB.O) were all marginally lower after taking the markets to record levels.

Videogame retailer GameStop Corp (GME.N) dropped 8.1% after cutting its fiscal 2019 outlook for profit and same-store sales, as customers delayed console purchases ahead of new launches.

At 07:18 a.m. ET, Dow e-minis 1YMcv1 were up 4 points, or 0.01%. S&P 500 e-minis EScv1 were down 2.75 points, or 0.08% and Nasdaq 100 e-minis NQcv1 were down 13 points, or 0.14%.

The U.S. Labor Department is expected to release consumer price data at 8:30 a.m. ET, which is likely to remain unchanged at 0.3% in December. Core CPI is also likely to remain unchanged at 0.2% in December.

Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta

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