(Reuters) – U.S. stock index futures were muted on Friday as investors were cautious ahead of earnings reports from the country’s biggest banks that are expected to shed light on the health of corporate America.
U.S. banking giants, which kick off the earnings season, are expected to report lower fourth-quarter profits as they set aside more reserves to cover for potential loan defaults.
Profits could also be curbed by banks paying more to keep depositors’ money in their accounts.
JPMorgan Chase, Bank of America and Wells Fargo dipped around 0.5% in trading before the bell. They are set to report at around 7:00 a.m. ET.
Citigroup, down 0.9%, is also expected to report quarterly results later in the day. A filing on Wednesday showed the lender booked about $3.8 billion in combined charges and reserves that will erode its fourth-quarter earnings.
The banking sector faced its worst turmoil since the 2008 financial crisis in March 2023, but finished the year with a 7% gain on hopes that the Federal Reserve could commence interest rate cuts in 2024.
Earnings from BlackRock, Delta Air Lines and UnitedHealth will also be on investors’ radar.
On the economic data front, investors are awaiting producer inflation data, due at 8:30 a.m. ET, where economists polled by Reuters forecast the Producer Price Index (PPI) to tick up to 0.1% on a monthly basis in December from a flat reading the month before.
The data would come on the heels of Thursday’s hotter-than-expected inflation print, which dampened some hopes for an early start to the Federal Reserve’s monetary policy easing cycle.
Traders’ expectations for an at least 25 basis points (bps) rate cut in March currently stand at 69.5%, as per the CME Group’s FedWatch Tool.
At 4:35 a.m. ET, Dow e-minis were up 64 points, or 0.17%, S&P 500 e-minis were up 3.25 points, or 0.07%, and Nasdaq 100 e-minis were down 4.5 points, or 0.03%.
Among early movers, Tesla declined 2.0% after trimming prices of some new China models.
The electric vehicle maker also said it will suspend most car production at its factory near Berlin, citing an impact due to shifts in transport routes because of attacks on vessels in the Red Sea.
Future FinTech tumbled 17.8% after the U.S. securities regulator charged the financial services firm’s CEO of fraud and disclosure failures for allegedly manipulatively trading in the group’s stock prior to becoming its chief.
Oil firms like Chevron, Exxon Mobil and Occidental Petroleum gained between 0.8% and 1.2%, tracking higher crude prices on supply concerns from the Middle East as the U.S. and Britain carried out strikes on Houthi military targets in Yemen. [O/R]
Later in the day, markets will parse comments by Minneapolis Fed President Neel Kashkari for any clues on the central bank’s policy trajectory.
(Reporting by Johann M Cherian in Bengaluru)
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