US pre-open: Stocks to edge higher as investors brace for more earnings
US stocks looked set to gain at the open on Tuesday, with energy shares likely to advance amid rising oil prices, as investors braced for more earnings and brushed aside the latest trade war rhetoric from President Trump.
At 1205 BST, Dow Jones Industrial Average and Nasdaq futures were up 0.3%, while S&P 500 futures were 0.2% firmer.
A day after announcing the re-imposition of sanctions against Iran, Trump warned on Twitter that anyone trading with the country would not do business with the US, as he claimed the sanctions were reinstated for the sake of world peace.
"The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!" Trump tweeted.
Energy shares were likely to rally as oil prices rose on expectations that the US sanctions on Iran will tighten supply, amid forecasts that supply losses could range from around 600,000 to 1.5m barrels per day.
David Cheetham, chief market analyst at XTB, said: "From a financial markets point of view, the price of crude oil could be where these decisions are most keenly felt, with the increased animosity threatening to disrupt Tehran’s significant output. This is unlikely to be reflected immediately, with Iranian production expected to remain at present levels for the time being, but should further more stringent sanctions come into play then we could well be set for a supply shock in the oil market which would trigger a sharp move higher.
"The complex nature of this situation means that it is not just the US and Iran that could be impacted, with the bulk of Iranian crude actually being sold to other countries. The issue lies in whether the US look to force allies to also shun oil from Iran, and if this occurs then there’s a real chance that OPEC will struggle to make up the lost supply and this would drive the price of oil up."
In corporate news, Office Depot looked set for a positive session as its second-quarter earnings beat estimates, but Dean Foods was sharply lower in pre-market trade after the food and drink company cut its full-year profit outlook.
Mallinckrodt surged in pre-market trade as the pharmaceutical products group posted better-than-expected second-quarter profit and sales and bumped up its full-year outlook.
Earnings are still due from Walt Disney and Emerson, among others.
On the data front, JOLTS job openings for June are at 1500 BST.