Nasdaq Futures Slightly Lower Ahead Of Big Tech Earnings

Nasdaq 100 futures fell slightly Monday evening after stocks bounced in the afternoon and ahead of Big Tech earnings. Futures tied to the tech focused index fell 0.1%. Dow Jones Industrial Average futures and S&P 500 futures were little changed.

In regular trading Monday, the Nasdaq Composite jumped 1.3%. The Dow advanced 0.7%, after cutting a 500-point loss from earlier in the day, and the S&P 500 gained 0.6%.

The moves came as tech names like Microsoft, Alphabet and Meta Platforms rallied in the afternoon, amid falling interest rates and ahead of an intense week of earnings for mega cap tech stocks. Twitter also jumped after its board accepted Tesla CEO Elon Musk’s offer to take it private.

The bounce was welcomed by investors after stocks ended the previous week on a sour note, with the Dow falling to its fourth down week in a row and the S&P and Nasdaq hitting three-week losing streaks Friday. The tech-heavy Nasdaq is attempting to break out of bear market territory, sitting 19.8% from its record.

Whether this is a bottom remains to be seen. There is still a lot of optimism about the US economy. A third of the S&P is reporting earnings this week, and traders are probably going to see much of the same: lots of top and bottom-line beats. Companies are going to talk about margin pressures and passing on price increases to the consumer, but they’re still going to highlight there’s still overall optimism about the economy.

Between the continuation of earnings beats and a quiet period from the Federal Reserve, there will likely be a relief rally in the market. Markets are not going to be getting more nervousness about Fed tightening, because we won’t be hearing much more about it until the May meeting.

Even though a treacherous first half to the year was expected, the market has been worse than it was expected, with inflation worsening relative to market expectations.

When the bond market is screaming for Fed to be a bit tighter, it is tough for stocks to hold up, but that does not mean that traders should be selling equities either.

Markets just want to have some sense of when this could end. If inflation does not reach some sort of apex that is concerning for markets. One of the biggest questions right now is whether inflation is going to continue to be a problem even in the second half of 2022.

Tech earnings will kick off on Tuesday after the bell with Alphabet and Microsoft. Meta, Amazon and Apple will report later in the week. UPS and 3M are also scheduled to report in the morning.

In economic data, investors are expecting fresh numbers for new home sales and consumer confidence on Tuesday morning.