Stock futures mostly open flat before earnings season kicks off

Stock futures opened mostly flat on Sunday night as the earnings season kicks off this week.

Futures on the Dow Jones Industrial Average added 25 points, or 0.07%. S&P 500 futures were up 0.08% and Nasdaq 100 futures were up 0.17%.

All three major indices closed at record highs on Friday after a massive selloff on Thursday as investors worried about a potential slowdown in US economic growth. Friday’s rally put the averages in the green for the week; the Dow Jones has added 0.24% since the start of the week, while the S&P 500 and the Nasdaq each have risen about 0.4% over the same period.

Economic recovery-related stocks that fell during Thursday’s session posted gains on Friday. Financial names rebounded, with Bank of America and Goldman Sachs both surging more than 3%. Travel-related stocks also rose; Royal Caribbean rose 3.6%, Wynn Resorts gained almost 2%, and American Airlines and United Airlines both added more than 2%.

Records for major averages precede the start of quarterly earnings reports. S&P 500 company profits are expected to rise 65% from the same quarter a year ago, Refinitiv says, rebounding from the worst of the pandemic. The expected rise in earnings would be the strongest earnings growth since the fourth quarter of 2009, as stocks recover from the financial crisis.

“The second quarter could be as good as it gets for economic growth,” said Callie Bost, senior investment strategist at Ally Invest. “Earnings growth could slow down, but analysts still expect double-digit earnings growth from S&P over the next two quarters. It is crucial not to lose confidence in the market just because the most growth is growing. The strong economy may be behind us. “

JPMorgan Chase, Goldman Sachs and PepsiCo kick off the earnings season with results expected ahead of the bell Tuesday. Bank of America, Citigroup, Wells Fargo, Delta Air Lines and BlackRock report Wednesday, and Morgan Stanley, Truist and UnitedHealth report their results Thursday.

Investors also expect important data to be released this week, including key inflation figures on Tuesday and Wednesday, and June retail sales on Friday.