With Home Depot’s poor earnings, U.S. equities are expected to open lower on Tuesday as worries about the possibility of the U.S. economy entering a recession grow.
The Nasdaq 100 Futures down 110 points or 0.9%, the S&P 500 Futures traded 27 points lower, and the Dow Futures contract was down 225 points or 0.7%.
The week began with a holiday to honor Presidents’ Day, and U.S. investors are expected to return to the markets on Tuesday. At this point, sentiment is still negative.
The broad-based S&P 500 declined for a second consecutive week, while the blue-chip Dow Jones Industrial Average had its third consecutive weekly decline. The tech-heavy Nasdaq Composite defied the trend last week by recording modest increases.
Sentiment has been negatively impacted by concerns that the U.S. Federal Reserve would approve more interest rate increases than previously anticipated to combat sticky inflation, thus Wednesday’s release of the minutes from the most recent Fed meeting will be the week’s main event.
Tuesday’s flash PMI data will provide an early indication of the health of the U.S. service and manufacturing sectors.
The comparable statistics from Europe, released earlier on Tuesday, showed a significant improvement in the dominating services sector, but the news was less positive for manufacturing.
In corporate news, it’s the turn of the retail sector to post dominant earnings this week.
The price of Home Depot’s (NYSE:HD) stock dropped more than 4% before the market opened because the home improvement retailer missed its sales projections for the fourth quarter and lowered its annual profit outlook due to rising supply chain costs.
The earnings report from Walmart (NYSE:WMT), the largest retailer in the world by sales, is also due out before the market opens on Tuesday. This report should show how strong consumer spending is despite rising prices.
After a report from Sky News that the financial behemoths are facing a significant class action lawsuit on behalf of British businesses over the amount of money businesses pay banks to accept credit or debit card payments, Mastercard (NYSE:MA) and Visa (NYSE:V) will also be in the attention.
A new premium membership service has also been revealed by Meta Platforms (NASDAQ:META) for its Facebook and Instagram platforms.
With the U.S. dollar strengthening and Russian President Vladimir Putin preparing his nation for a prolonged battle in Ukraine in a keynote speech during the week commemorating the anniversary of his invasion of the neighbouring nation, oil prices struggled to find direction on Tuesday.
Due to the holiday on Monday, the American Petroleum Institute and U.S. government oil inventory estimates for the previous week will be released one day later than usual.
U.S. crude futures traded 0.9% higher at $77.19 a barrel, while the Brent contract fell 0.4% to $83.75.
Additionally, gold futures fell 0.4% to $1,843.15/oz, while EUR/USD traded 0.2% lower at 1.0659.