S&P 500 gains 0.15% but Wall Street fears a 9.2% post-earnings drop

S&P 500 futures inched higher early Tuesday after the broad market index posted its third consecutive losing session amid concerns about tech shares and the economic outlook.

S&P 500 futures rise slightly amid tech stock concerns

Futures linked to the S&P 500 rose 0.15%, while Nasdaq-100 futures traded around the flatline. Futures for the Dow Jones Industrial Average gained 71 points, or 0.16%.

In Monday’s regular trading, shares of key tech companies weighed down the S&P 500 and the Nasdaq Composite, resulting in session losses. The defense tech and artificial intelligence company Palantir fell over 10%, and Microsoft lost 1% following a report from TD Cowen indicating a reduction in data center spending. Nvidia’s stock declined by 3% ahead of its quarterly results set to be released Wednesday after the bell.

The decline among tech stocks pulled the Nasdaq Composite into negative territory year to date. Doug Clinton, managing partner at Deepwater Asset Management, noted on CNBC’s Closing Bell that investors seem to doubt the longevity of the AI trade. He asserted, “From our perspective, the AI trade is still real. I don’t think this boom is over. I still think we have two to four years to go.”

6 AI stocks that could 10X and one that might 100X

Upcoming earnings and economic data

In addition to Nvidia’s earnings report, Wall Street expects several key results this week, including Home Depot’s release prior to the market’s opening on Tuesday. Economic indicators also remain in focus, with the latest U.S. Consumer Confidence data scheduled for release at 10:00 a.m. ET Tuesday. Economists surveyed by Dow Jones forecast the Conference Board’s consumer confidence index will register at 102.3 for February, down from January’s 104.1 reading.

This report is part of a series of economic data expected later in the week, including the January Personal Consumption Expenditures price index reading set for Friday. The PCE index is regarded as the Federal Reserve’s preferred measure of inflation.

Stock movements after hours

Hims & Hers Health shares dropped more than 17% in extended trading after reporting a fourth-quarter gross margin of 77%, below analyst expectations of 78.4%. Zoom Communications saw a decline of about 1% after projecting full-year revenue of $4.79 billion to $4.80 billion, slightly below analyst expectations of $4.81 billion. Cleveland-Cliffs also fell by 2% following fourth-quarter results that missed Wall Street’s forecasts, reporting a loss of 92 cents per share on $4.33 billion in revenue, compared to expectations of a loss of 61 cents per share on $4.43 billion in revenue.

In other market activities, the U.S. stock futures opened little changed Monday night following the recent declines in both the S&P 500 and the Nasdaq Composite, with futures tied to the S&P 500 and Nasdaq-100 up approximately 0.1%. The Dow Jones futures improved by 48 points, or 0.1%.

Featured image credit: Tatiana Fet/Pexels