By Devik Jain
(Reuters) -U.S. stock index futures edged higher on Tuesday, led by technology shares, although the overall sentiment remained fragile due to worries about higher inflation and its impact on third-quarter earnings starting this week.
Mega-caps growth names including Microsoft Corp, Amazon.com Inc, Google-parent Alphabet and Tesla rose in premarket trading.
Tesla gained 1.1% after data showed the electric vehicle maker sold 56,006 China-made vehicles in September, the highest since it started production in Shanghai about two years ago.
Oil firms including Exxon Mobil and Chevron Corp edged up as Brent crude hit a near three-year high on energy crunch fears. [O/R]
The S&P energy sector has gained 49.5% so far this year, outperforming all the other sectors and the benchmark index by a large margin.
Higher oil prices and supply chain disruptions have set off alarm bells for businesses and consumers ahead of the third-quarter reporting season that begins on Wednesday with JPMorgan Chase & Co.
“Market participants could stay concerned over high energy prices translating into further acceleration in inflation, and thereby faster tightening by major central banks,” said Charalambos Pissouros, head of research at JFD Group.
Shares of JPMorgan and other major U.S. lenders traded lower.
Analysts expect a 29.6% year-over-year increase in profit for S&P 500 companies in the third quarter, according to IBES data from Refinitiv as of Friday.
“Right now we are in an information vacuum and the market is mainly looking forward to the earnings season… and that is really going to set the pace,” said Thomas Hayes, managing member at Great Hill Capital Llc in New York.
“Expectations are quite low for the third quarter with Delta and everything else, really setting the stage for companies to beat beyond expectations.”
At 8:34 a.m. ET, Dow e-minis were up 59 points, or 0.17%, S&P 500 e-minis were up 10.5 points, or 0.24%, and Nasdaq 100 e-minis were up 65.75 points, or 0.45%.
Investors also awaited the release of minutes from the Federal Reserve’s meeting on Wednesday for clues on taper timeline, while inflation and retail sales data will be scrutinized to gauge the pace of economic recovery.
Fed’s Vice Chair Richard Clarida, Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin are slated to speak at separate events later in the day.
MGM Resorts International added 2.2% after Credit Suisse upgraded the U.S. casino operator’s stock to “outperform” from “neutral”.
Nike Inc rose 1.3% after Goldman Sachs started its coverage on the sportswear maker’s stock with a “buy” rating.
American Airlines gained 1% after it forecast a smaller-than-expected adjusted net loss for the third quarter.
(Reporting by Devik Jain, Shreyashi Sanyal in Bengaluru and Federica Urso in Gdansk; Editing by Saumyadeb Chakrabarty)
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