U.S. stock futures drift down with earnings in focus

By Scott Kanowsky

Investing.com -- U.S. stocks are seen edging lower on Tuesday, with traders eyeing a fresh wave of major corporate earnings that could provide clues into the outlook for the broader economy.

At 06:51 ET (11:51 GMT), the Dow Futures contract was down 81 points, or 0.24%, S&P 500 Futures traded 9 points, or 0.23% lower, and Nasdaq 100 Futures decreased by 42 points, or 0.35%.

The moves come after U.S. equities rallied in the prior session, with optimism growing that the Fed will slow its recent cycle of monetary tightening when policymakers meet next week. Some officials at the U.S. central bank, including Fed governor Christopher Waller, have backed a smaller 25-basis point rate hike despite lingering concerns over how long it will take for inflation in the world's largest economy to fall back to the Fed's 2% target.

Asian stocks added to their recent rise, although trading remained thin with China and much of the region still closed for Lunar New Year celebrations. Shares in Europe wavered, however, as investors retained some caution about the broader outlook for the region despite a surprise expansion in Eurozone business activity in January. The monthly purchasing managers' indexes for the U.S., scheduled for release at 09:45 ET, is now set to capture economists' attention.

Highlighting the day is a raft of new company earnings, with analysts on the lookout for guidance revisions that could hint at the health of the U.S. economy.

Several key firms, including General Electric (NYSE:GE), Verizon (NYSE:VZ), 3M Company (NYSE:MMM), Raytheon Technologies (NYSE:RTX), and Johnson & Johnson (NYSE:JNJ), are all slated to unveil their latest results before the bell. Tech giant Microsoft (NASDAQ:MSFT) will also report after the trading day on Wall Street.

Elsewhere in corporate news, shares in Alphabet (NASDAQ:GOOGL) dipped in pre-market trading after Bloomberg News reported that the U.S. Justice Department is poised to sue Google as soon as today over the tech giant's online advertising dominance.

Advanced Micro Devices (NASDAQ:AMD) shares also moved down before the bell following a downgrade of the stock by Bernstein to Market Perform from Outperform. Bernstein cited a worsening PC climate for the semiconductor firm.

But Lyft (NASDAQ:LYFT) saw its stock lift ahead of the U.S. open after KeyBanc analysts upgraded their rating of the ride-sharing group to Overweight from Sector Weight.

Meanwhile, U.S. crude futures traded 0.43% higher at $81.97 a barrel, while the Brent contract increased by 0.27% to $88.43 by 06:51 ET, with oil markets searching for signs of a rebound in demand in China following the recent easing of COVID-19 restrictions in the country.

Additionally, gold futures inched up 0.54% to $1,939.05/oz, while EUR/USD gained slightly by 0.05% to 1.0873.

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