US pre-open: Futures slip as investors await earnings barrage

(Sharecast News) - US stock futures were pointing to a weak start on Wall Street on Tuesday as investors awaited a barrage of corporate earnings and retail sales data. Futures on the Dow, S&P 500 and Nasdaq were all down 0.2% in pre-market trade, with the S&P 500 set to pull back after its strongest daily performance in nearly two months on Monday (+1.1%).

Ongoing conflict in the Middle East will likely keep a lid on risk appetite for now with Israeli government threatening to launch a ground offensive in Gaza. However, diplomatic efforts by other nations - including the US with president Joe Biden scheduled to visit Israel on Wednesday - may be limiting the damage to market sentiment in the short term.

"The point to make here regarding the 'markets' is just how bad investors are at pricing geopolitical risk, and how hard it is to try to price in the tail risks of a wider conflict," said analyst Neil Wilson from Markets.com. "We don't yet know how this plays out so we are discounting lots of potential outcomes and working through it day by day."

All eyes are on the corporate results right now as third-quarter earnings season kicks into full gear, after last week's results from Citigroup, Wells Gargo and JPMorgan Chase were largely well received by the market.

Tuesday will see the release of earnings from heavyweights Johnson & Johnson, BNY Mellon, Lockheed Martin, Goldman Sachs and Bank America; while Netflix and Tesla will publish their figures on Wednesday.

Oil prices were edging higher once again after pulling back on Monday following Friday's 6% surge on the back of rising tensions in Israel; WTI crude futures were up 0.3% at $86.95 a barrel early on in Tuesday trading. Meanwhile, the yield on a 10-year US Treasury was up 4 basis points at 4.752%.

In terms of the economic data calendar, the major release of the day will be US retail sales, due out at 0830 ET. Sales are expected to have risen 0.3% in September, after a 0.6% gain in August.

Industrial production stats for September and the NAHB housing market index will also be out later on.

Meanwhile, John Williams, president of the New York Fed, is scheduled to speak at 0800 ET, following by Fed governor Michelle Bowman and Richmond Fed president Thomas Barkin later in the session.