(Reuters) – U.S. stock index futures were muted on Friday as the country’s top lenders report results against the backdrop of a possible end to the Federal Reserve’s interest rate hikes that have swelled profits for the big banks.
Investors will also watch out for any impact from the biggest banking crisis since 2008 earlier this year that took down three lenders and pummeled the sector.
Shares of the big banks were mixed in premarket trading. JPMorgan Chase was up 1.23%, while Citigroup was down 0.1% and Wells Fargo remained flat.
“Close attention will be paid to big bank earnings out later today with investors looking for signs that lenders have grown increasingly risk averse after this spring’s sector wobble,” said Danni Hewson, head of financial analysis at AJ Bell.
BlackRock and UnitedHealth Group are also expected to report earnings ahead of the open.
Overall, earnings for the S&P 500 constituents are expected to have dropped 6.4% in the second quarter, Refinitiv data showed.
The Nasdaq and the S&P 500 ended the last two sessions at over one-year highs after data signaled easing price pressures in the United States, adding to hopes that the Federal Reserve could wind up its rate hiking cycle soon after delivering a widely expected 25 basis point rate hike in July.
U.S. stocks are on course for robust weekly gains, with the tech-heavy Nasdaq set for its best week since mid-March.
Late on Thursday, Federal Reserve Governor Christopher Waller said he’s not ready to call an all clear on inflation and supports two more 25 basis point rate hikes this year.
Investors will also look ahead to a preliminary University of Michigan survey that is expected to show consumer sentiment improved in the month of July.
At 5:20 a.m. ET, Dow e-minis were down 32 points, or 0.09%, S&P 500 e-minis were down 2.25 points, or 0.05%, and Nasdaq 100 e-minis were up 1.25 points, or 0.01%.
Among top performers, Microsoft gained 1.5% after brokerage UBS turned bullish on the tech giant, with a “buy” rating.
Activision Blizzard added 2.7% as the gaming firm along with Microsoft are considering giving up some control of their cloud-gaming business in the UK to appease regulators, as per a report.
AT&T slipped 1.7% after JP Morgan downgraded its rating on the telecom firm to “neutral”.
(Reporting by Johann M Cherian in Bengaluru; Editing by Saumyadeb Chakrabarty)
