- US stock futures inched up Tuesday, as investors weighed relatively strong company earnings against worries about inflation.
Stocks have had a choppy run asmarkets brace for the Federal Reserve to raise interest rates this year.
US stock futures edged higher Tuesday as investors remained caught in a tug-of-war between excitement about strong company earnings reports and fears about red-hot inflation. Bond yields resumed their march higher.
S&P 500 futures were up 0.1%, Nasdaq 100 futures were 0.09% higher, and Dow Jones futures rose 0.14% in European trading. On Monday, the benchmark S&P 500 index finished 0.4% lower after a choppy day of trading.
The main event this week for investors is the release of January US CPI inflation data on Thursday. It's expected to show inflation hit 7.3% year-on-year last month, a new 39-year high, according to analysts polled by Bloomberg.
A stronger reading could cause the Federal Reserve to raise interest rates faster, with the market currently expecting five hikes of 25 basis points each this year.
The yield on the key 10-year US Treasury note rose as high as 1.96% Tuesday, its highest level since 2019, as investors braced for the Fed to move. It was last up roughly 2 basis points to 1.932%, after paring some of its gains.
Bond yields move inversely to prices, and the expectation of an increase in interest rates pushes up yields, as investors demand a higher return.
However, investors' concerns about inflation have been tempered by a relatively strong fourth-quarter earnings season and signs of strength in the economy.
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"We believe that equities still offer upside, and that the cycle is far from over. We look for more gains in earnings," said JPMorgan strategists, led by Mislav Matejka, in a note Monday.
Pfizer and Lyft are among the companies due to release earnings results Tuesday. Peloton, whose stock soared almost 21% Monday on reports of takeover interest from Amazon and Nike, is set to report after the market close.
The JPMorgan analysts also said they expect China's economy to pick up after a rough run, and for the Fed not to turn ever more hawkish, relative to what is currently priced in.
UBS Global Wealth Management said Tuesday it thinks the S&P 500 can rally to 5,100 by the end of the year — a 13% increase from Monday's closing level of 4,483.87.
"With demand remaining healthy, we advise investors to focus on winners from global growth," Mark Haefele, chief investment officer at UBS GWM, said.
Asian stocks slipped overnight, with China's CSI 300 down 0.55%, and Hong Kong's Hang Seng 1.02% lower. Europe's Stoxx 600 index was up 0.37% in morning trading.
Elsewhere in markets, oil prices cooled slightly following a major run-up. WTI crude was down 1.97% to $89.52 a barrel, while Brent crude was 2.11% lower at $90.73 a barrel.
Strong global demand, ongoing supply restraint from producer countries, and the threat of war in Ukraine are just some of the factors that have dramatically boosted crude oil prices over the last year.
Bitcoin continued to show strength, rallying above $45,000 Tuesday before paring its gains. It was last down 0.7% to $43,790, according to Bloomberg prices.
That was well above Friday's $38,000 level, but still considerably lower than November's record high of more than $68,000.