By Shivani Kumaresan
(Reuters) – U.S. stock index futures dipped on Monday after the S&P 500 and the Dow closed at record levels in the previous session, as investors geared up for the start of the earnings season and a key inflation report this week.
A pullback in the benchmark 10-year bond yield from 14-month highs in April eased worries about higher borrowing costs, helping richly valued high-growth technology stocks gain ground and drive the S&P 500 and the Dow to record levels.
U.S. consumer price data for March and $271 billion of U.S. Treasury auction this week could end a recent lull in the bond market, reigniting a rise in yields that worried investors in the first quarter.
The Federal Reserve Chair Jerome Powell on Sunday said the U.S. economy is at an “inflection point” with expectations that growth will pick up speed in the months ahead, but also risks if a hasty reopening leads to a continued increase in coronavirus cases.
Results from big U.S. banks Goldman Sachs, JPMorgan and Wells Fargo will pour in on Wednesday, kicking off the first-quarter earnings season where investors will look for reasons to support a stock market at all-time highs.
S&P 500 earnings are expected to have jumped 25% in the quarter from a year ago, according to Refinitiv IBES data, the biggest quarterly gain since 2018, when tax cuts under former President Donald Trump drove a surge in profit growth.
At 06:29 a.m. ET, Dow E-minis were down 76 points, or 0.23%, S&P 500 E-minis were down 9 points, or 0.22% and Nasdaq 100 E-minis were down 46 points, or 0.33%.
Tesla Inc rose about 2% in premarket trading after Canaccord Genuity upgraded the electric-car maker’s shares to “buy” and said the company could become “the brand” in energy storage.
U.S. shares of Alibaba jumped 6.3% after the ecommerce company said it does not expect any material impact from the antitrust crackdown in China that will push it to overhaul how it deals with merchants.
Shares of Nuance Communications Inc surged about 23% as a source said Microsoft Corp is in advanced talks to buy the artificial intelligence and speech technology company at about $16 billion.
(Reporting by Shivani Kumaresan and Medha Singh in Bengaluru; Editing by Maju Samuel)
