Wall Street poised for gains, Disney stumbles with Q2 loss

Wall Street experienced fluctuations between gains and losses early Tuesday as investors anticipated more corporate earnings reports in what is forecasted to be a quiet week.

Futures for both the S&P 500 and the Dow Jones Industrial Average saw slight increases of less than 0.1%.

Disney’s stock dropped over 6% in premarket trading following a reported second-quarter loss attributed to restructuring expenses and other charges. While Disney exceeded expectations on an adjusted earnings per share basis, it fell short on revenue targets.

Tesla’s stock also saw a decline after the U.S. National Highway Traffic Safety Administration inquired about the details and rationale behind a software update in a recall affecting over 2 million vehicles. The update was intended to address issues with Tesla’s Autopilot system. The company’s shares dropped by 1.8% before the market opened, contributing to a year-to-date decline of more than 25%.

With the majority of S&P 500 companies having already released their first-quarter earnings, the focus this week is less intense. Over three-quarters of these companies have surpassed profit expectations, as reported by FactSet.

According to Deutsche Bank strategists, corporate earnings globally have also been stronger than anticipated, marking a second consecutive quarter of growth following four quarters of declines.

The U.S. stock market has shown volatility, swinging between gains and losses since reaching a record high at the end of March. Initial declines were driven by concerns that persistent inflation might delay interest rate cuts by the Federal Reserve. However, the market rebounded at the end of last week after a jobs report suggested that the U.S. economy might avoid a severe recession without further fueling inflation.

Market traders now see a nearly 89% chance of at least one Fed rate cut by the end of the year, up from 81.6% a week ago, as per CME Group data.

In European markets, Britain’s FTSE 100 was up by 1%, Germany’s DAX increased by 0.6%, and France’s CAC 40 rose by 0.4% around midday.

In Asia, Japan’s Nikkei 225 led gains with a 1.6% increase, bolstered by strong performances in the semiconductor sector. South Korea’s Kospi also jumped by 2.2%, supported by major tech firms. Conversely, Hong Kong’s Hang Seng index fell by 0.5%, while China’s Shanghai Composite index edged up by 0.2%.

Australia’s S&P/ASX 200 climbed 1.4% following the central bank’s decision to maintain interest rates at 4.35%.

In commodity markets, U.S. crude oil prices dropped 34 cents to $78.14 per barrel, while Brent crude decreased by 32 cents to $82.98 per barrel.

Currency markets saw the U.S. dollar rise to 154.39 Japanese yen from 153.90 yen, and the euro remained steady at $1.0769.

On Monday, the S&P 500 increased by 1%, the Dow industrials grew by 0.5%, and the Nasdaq composite advanced by 1.2%.