Stocks - US Futures Mixed Ahead of Earnings; Dow Futures Down 79 Pts

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Stocks - US Futures Mixed Ahead of Earnings; Dow Futures Down 79 Pts
Credit: © Reuters.

By Peter Nurse - U.S. stocks are set to open mixed Wednesday, as the earnings season continues amid uncertainty over the scale and timing of the next fiscal stimulus, while tensions with China become even more fraught.

At 7 AM ET (1100 GMT), S&P 500 Futures traded 7 points, or 0.2%, lower, Nasdaq Futures up 28 points, or 0.3%. The Dow Futures contract fell 79 points, or 0.3%.

U.S. policymakers continue to debate a new coronavirus aid bill, but there are now doubts there will be an agreement over its size and scope. Senate Republicans and the Trump administration are reportedly struggling to reach a consensus with each other, let alone with the Democrats who control the House of Representatives. .

Senate Majority Leader Mitch McConnell was reported Tuesday to have said that he doesn't expect that the bill would be rolled out within the next two weeks. With Congress set for a recess in August, time is running out for the policymakers to resolve their differences. 

The debate comes amid signs that the economic recovery in the U.S. is levelling off amid a second surge in coronavirus cases. The country recorded over 1,000 deaths within a 24-hour period on Tuesday for the first time since June.

U.S. President Donald Trump warned Tuesday that the “virus will get worse before it gets better”, while changing his rhetoric about wearing face masks.

Meanwhile, investors are also looking at the escalation of tension between the world’s two biggest economies, after the U.S. ordered China to close its consulate in Houston and indicted two hackers in China for stealing intellectual property worth hundreds of millions of dollars, including research into treatments for the Covid-19 virus.  China has vowed to retaliate.

The second-quarter earnings season continues, with Thermo Fisher (NYSE: TMO ) and Check Point Software (NASDAQ: CHKP ) both exceeding expectations for earnings in the three months through June. although the biggest names Tesla (NASDAQ: TSLA ) and Microsoft (NASDAQ: MSFT ) are due after the close. 

U.S. economic data centers around the existing home sales release, at 10 AM ET (1400 GMT). Sales are expected to have risen in June after falling in May to the lowest level since 2010. 

Oil prices fell Wednesday, weighed by a bigger-than-expected crude inventory build in the United States, suggesting a dent in demand from the world's biggest oil consumer.

Industry group American Petroleum Institute reported late Tuesday that U.S. inventories rose last week by 7.5 million barrels when expectations had been for a small draw. Attention will now turn to the U.S. government crude data at 10:30 AM.

At 7:05 AM ET, U.S. crude futures traded 1.5% lower at $41.30 a barrel, while Brent fell 1.2% to $43.77.

Elsewhere, gold futures rose 0.8% to $1,858.60/oz, while EUR/USD traded at 1.1574, up 0.4%.

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