Dow Futures Rise 325 Pts; Bank of America Tops Quarterly Estimates

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Dow Futures Rise 325 Pts; Bank of America Tops Quarterly Estimates
Credit: © Reuters.

By Peter Nurse -- U.S. stocks are seen opening higher Monday, with the earnings season set to get fully underway against a backdrop of aggressive monetary tightening by the Federal Reserve.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up 325 points or 1.1%, S&P 500 Futures traded 45 points or 1.2% higher, and Nasdaq 100 Futures climbed 145 points or 1.4%.

The main U.S. equity indices closed lower Friday, with the broad-based S&P 500 recording a 1.6% weekly loss, its fourth negative week in five, as investors worry that the Fed's campaign of hefty rate hikes to combat inflation could tip the economy into a recession.

White House economic adviser Cecilia Rouse said on Sunday that these interest rate increases were starting to cool the "red-hot" U.S. economy, especially labor and housing markets, but added that inflation was still too high.

The third quarter earnings season heats up this week, with Reuters reporting that earnings for S&P 500 companies, overall, are expected to have climbed 4.1% from the year-earlier period, which would be the slowest growth since the fourth quarter of 2020.

Bank of America (NYSE: BAC ) will be in the spotlight, topping quarterly estimates on better-than-expected bond trading and higher interest rates, following on results from JPMorgan Chase (NYSE: JPM ), Wells Fargo (NYSE: WFC ), Citigroup (NYSE: C ) and Morgan Stanley (NYSE: MS ) on Friday.

Goldman Sachs (NYSE: GS ) will also be in focus, ahead of Tuesday's results, after the Wall Street Journal reported that it was planning a sweeping reorganization, combining its flagship investment banking and trading businesses into one unit.

Honeywell International (NASDAQ: HON ) lifted its outlook for business jet deliveries over the weekend, as the COVID-19 pandemic brought in a wave of first-time users and buyers in the private flying market.

Sentiment has been boosted Monday by the news that new British finance minister Jeremy Hunt has decided to reverse almost all parts of Prime Minister Liz Truss's proposed unfunded tax cuts, attempting to end the rout in the U.K. bond market which were causing ripples elsewhere.

Oil prices rose Monday, helped by minor dollar selling as well as hopes of improved demand from China, the world's top crude importer.

President Xi Jinping said on Sunday that Beijing will ramp up spending and stimulus to help shore up economic growth, potentially boosting crude imports which have been hit by slowing activity as a result of COVID disruptions.

By 07:00 ET, U.S. crude futures traded 0.3% higher at $84.94 a barrel, while the Brent contract rose 0.3% to $91.94.

Additionally, gold futures rose 0.8% to $1,662.75/oz, while EUR/USD traded 0.3% higher at 0.9745.

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