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Investing.com – U.S. stocks are set to edge higher at the open Wednesday, rebounding after Tuesday’s losses, but gains are likely to be limited as investors cautiously await the upcoming earrings season while coronavirus cases still mount.
At 7:05 AM ET (1105 GMT), S&P 500 Futures traded 4 points, or 0.1%, higher, Nasdaq Futures up 33 points, or 0.3%. The Dow Futures contract rose 10 points, or 0.1%.
Overnight, U.S. stocks fell, halting a five-day winning streak by the benchmark S&P 500 index, its longest this year. The run has been driven by better-than-expected economic data and extraordinary fiscal and monetary aid from the U.S. authorities.
The second-quarter earnings season begins in earnest next week, and the news isn’t likely to be good given the impact of the coronavirus-inspired shutdown during most of this period.
Market data provider Refinitiv predicts earnings from the S&P 500 companies to fall 43% year-on-year in the second quarter. Given the fall in earnings in the year’s opening quarter, this would mean the first earnings recession since the global financial crisis.
Meanwhile the news surrounding the coronavirus continues to be worrying, with the U.S. posting over 60,000 new cases of Covid-19 for the first time and the total topping 3 million. Cases are rising in 41 out of 50 states, with California, Hawaii, Missouri, Montana, Oklahoma and Texas all beating their previous daily record highs for new cases on Tuesday.
“It will be important to watch the number of U.S. deaths in coming weeks and whether greater questions will be asked about the extent of necessary restrictions,” said NAB economist Tapas Strickland, in a Reuters report.
In corporate news, retailer Levi Strauss (NYSE:LEVI) is likely to be in focus after reporting a 62% fall in sales in its most recent quarter after the closing bell Tuesday.
Bed Bath & Beyond (NASDAQ:BBBY) reports fiscal first-quarter earnings after the close on Wednesday, and these are likely to be adversely affected by store closures because of the coronavirus pandemic.
Oil prices are drifting, despite worries about a smaller than expected decline in U.S. crude oil production in 2020 and a rise in U.S. crude oil stockpiles last week.
Prices have been held in a narrow range over the past two weeks as concerns about a spike in coronavirus cases globally tempers optimism about a recovery in fuel demand.
The Energy Information Administration’s weekly oil inventory report is due at 10:30 AM ET.
At 7:05 AM ET, U.S. crude futures traded 0.2% lower at $40.53 a barrel. The international benchmark Brent contract fell 0.1% to $43.06.
Elsewhere, gold futures rose 0.3% to $1,815.25/oz, climbing above the $1800 level for the first time since November 2011, while EUR/USD traded at 1.1283, up 0.1%.
