US pre-open: Futures point to losses ahead of earnings deluge

Wall Street futures had stocks opening lower on Tuesday ahead of a veritable array of major corporate earnings.

As of 1230 BST, Dow Jones futures were down 0.43%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.32% and 0.37% lower, respectively.

The Dow closed 114.88 points higher on Monday as market participants prepared for a week full of major corporate earnings amid continued stimulus talks in Washington.

The Republican Party's coronavirus relief plan was in focus before the open on Tuesday after Senate Majority Leader Mitch McConnell unveiled the bill overnight.

The new legislation will offer relief for unemployed Americans and include another direct payment to individuals of as much as $1,200, as well as more Paycheck Protection Program, small business loan funds and other provisions.

McConnell said the bill would set federal unemployment insurance at 70% of a worker's previous wages, replacing the $600 per week which was set to cease being paid this week.

Also in focus, the Federal Reserve will start its two-day policy meeting, followed by an interest rate decision on Wednesday.

The FOMC maintained its target range for the federal funds rate at 0-0.25% at its last meeting in June as the Covid-19 pandemic continued to wreak havoc on the US economy.

AvaTrade's Naeem Aslam said: "The stock rally is dependent on the outcome of the Federal Reserve meeting. Policymakers in Washington still haven’t delivered another stimulus package, and it seems likely that it will be further delayed.

"Now, there is more pressure on the Fed to support the stock market; otherwise, stocks could crash."

In corporate news, 3M posted quarterly profit figures that fell short of estimates on the Street ahead of the bell, while Raytheon reported second-quarter profit and revenue that beat expectations.

Pfizer and Raytheon will also report before the start of trading, while Visa, Advanced Micro Devices, Amgen, eBay and Starbucks will report throughout the course of the session.

On the macro front, May's S&P/Case-Shiller home price index will be released at 1400 BST, while July's consumer confidence figures and Richmond Fed manufacturing index will follow at 1500 BST.