US stock futures fall ahead of stream of earnings, with Fed comments and Russia's renewed assault on traders' minds
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- US stock futures slipped as traders weighed earnings, Fed comments and Russia's renewed assault on Ukraine.
- Netflix and Johnson & Johnson are scheduled to report earnings Tuesday, with Tesla's update due Wednesday.
- Bond yields rose after Fed official James Bullard raised the prospect of 75 basis point interest-rate hikes.
US stock futures fell alongside European equities Tuesday as traders prepared for a slew of big company earnings reports, digested comments from Federal Reserve officials, and eyed Russia's fresh assault on Ukraine.
Futures tied to the S&P 500 were down 0.28% as of 6:00 a.m. ET. Dow Jones futures were 0.19% lower, and Nasdaq 100 futures dropped 0.45%. The US benchmarks lost ground Monday after an up-and-down session.
Europe's continent-wide Stoxx 600 equity index fell 1.37% in morning trading as it reopened after a holiday. Overnight, China's CSI 300 fell 0.76%, but Tokyo's Nikkei 225 rose 0.69%.
Earnings season is getting into full swing in the US, with Netflix and Johnson & Johnson set to report Tuesday. Tesla, whose CEO Elon Musk is locked in a battle to buy Twitter, is scheduled to release its update Wednesday.
So far, 37 companies from the S&P 500 have reported earnings. Overall results have beaten estimates by a median of 6%, with 73% of those reporting bettering expectations, according to analysts at Fundstrat.
Earnings are far from the only thing on investors' minds, however. Late Monday, central bank policy took center stage again when St. Louis Fed President James Bullard said interest-rate increases of 75 basis points shouldn't be ruled out.
He said the Fed should raise interest rates quickly, to stamp down on the strongest inflation in 40 years.
"What we need to do right now is get expeditiously to neutral, and then go from there," he told a virtual Council on Foreign Relations event.
The Fed reckons the "neutral" interest rate, which neither harms nor boosts the economy, is somewhere around 2.5%.
Bond yields, which move inversely to prices, marched higher following Bullard's comments.
The yield on the key 10-year US Treasury note rose 3.5 basis points to 2.897%, its highest level since late 2018. When investors expect interest rates to rise, they demand a higher return on bonds to compensate.
Also on traders' minds was Russia's renewed assault on Ukraine, which is focused on the Donbas region in the east.
"We can already state that the Russian troops have begun the battle for the Donbas," Ukrainian President Volodymyr Zelenskyy said in a video address. He added that a "significant part of the entire Russian army is now concentrated on this offensive."
Elsewhere in markets, oil prices slipped after rallying in recent days. Brent crude was down 1.36% to $111.62 a barrel, while WTI crude was 1.58% lower at $106.50 a barrel.
The dollar index was little changed at 100.80, having risen sharply in recent weeks as investors have dialed up their expectations for Fed interest rate hikes. Higher interest rates make dollar investments look more attractive.
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