The Goldman Sachs booth on the floor of the New York Stock Exchange
U.S. stock futures were slightly lower early Tuesday morning after the Dow Jones Industrial Average rose Monday to almost 35,000 ahead of the second-quarter earnings season for banks, which kick off later in the day.
Investors are turning their attention to banks as they prepare to release their second quarter earnings this week, starting with JPMorgan and Goldman Sachs Tuesday before the opening bell. JPMorgan and Goldman Sachs ended the day 1.4% and 2.3% higher, respectively.
Banks are expected to double this quarter, following the 138% earnings growth the sector saw in the first quarter. The S&P 500 broadly is expected to produce its strongest earnings growth since the fourth quarter of 2009.
“High expectations for earnings and each companies’ forward guidance will push markets higher or disappointment may create a small pullback in equity markets,” said Jeff Kilburg, chief investment officer at Sanctuary Wealth. “Eyes will be on the major banks to set the tone for the next few weeks of earnings.”
Federal Reserve Chairman Jerome Powell is scheduled to appear in front of Congress Wednesday and Thursday to provide an update on monetary policy. He has maintained that the Fed’s easy policies will remain intact until there’s more progress on its employment and inflation goals.