Stock futures retreated Tuesday as a decline in bank shares dampened investor sentiment. Futures tied to the Dow Jones Industrial Average fell by 248 points, or 0.7%. S&P 500 futures and Nasdaq 100 futures each slid 0.7%. Bank shares fell broadly after Moody’s downgraded the credit rating on several banks, including M&T Bank and Pinnacle Financial. The credit agency also placed Bank of N.Y. Mellon and State Street on review for a downgrade. Goldman Sachs and JPMorgan Chase traded about 1% lower in the premarket. The SPDR S&P Regional Banking ETF (KRE), which tracks a group of smaller banks, dipped more than 2%. Earnings season continued. UPS shares dropped 5% after the delivery giant reported weaker-than-expected revenue for the second quarter. The company also lowered its full-year revenue outlook. Educational tech company Chegg popped nearly 20% after reporting second-quarter revenue of $183 million, beating analysts’ estimate of $177 million, per Refinitiv. The corporate earnings season has so far been better-than-expected. With roughly 89% of S&P 500 stocks done reporting quarterly results about four-fifths of them have beaten Wall Street’s expectations, according to FactSet. Futures came somewhat off lows Tuesday morning after Philadelphia Federal Reserve President Patrick Harker signaled the central bank could be at the end of its current rate-hiking cycle. On the economic data front, traders are looking ahead to July’s consumer price index report, out Thursday. The inflation metric could put Wall Street’s belief in a soft landing to the test. Economists polled by Dow Jones are calling for a monthly increase of 0.2% in July and a year-over-year rise of 3.3%. Wall Street is coming off a strong performance Monday. The 30-stock Dow surged more than 400 points, or nearly 1.2%, for its best day since June 15. The Nasdaq Composite added 0.6%, and S&P 500 closed higher by 0.9%. The tech-heavy Nasdaq and the S&P 500 broke four-straight sessions of losses. Asia-Pacific markets were mixed on Tuesday as China’s July trade came in lower than expected. China saw a 14.5% year-on-year drop in exports, while imports came in 12.4% lower year-on-year. Economists polled by Reuters expected a 12.5% slide in exports and a 5% drop in imports. Hong Kong’s Hang Seng index slipped 1.74% in its final hour, and mainland Chinese markets are all lower. the Shanghai Composite fell 0.25% to end at 3,260.62 and the Shenzhen Component was down 0.42%, closing at 11,098.45. Japan’s Nikkei 225 rose 0.38% to take its winning streak to three days and end at 32,377.29, while the Topix was up 0.34% and closed at 2,291.73 as the country’s household spending remained in negative territory for the fourth straight month. Overall household spending fell 4.2% year on year in June, compared with 4% in May, official data showed. In Australia, the S&P/ASX 200 climbed marginally and ended at 7,311.1, while South Korea’s Kospi dipped 0.26% to mark five straight days of losses and the Kosdaq slipped 0.65% to 892.34. Oil prices fell by about 1.5% on Tuesday after data showed China’s imports and exports fell much more than expected in July in yet another sign of a sluggish post-COVID rebound for the world’s largest oil importer. Brent crude futures were down $1.13, or about 1.3%, at $84.12 a barrel. U.S. West Texas Intermediate crude was down $1.17, or about 1.4%, at $80.77. Gold edged lower on Tuesday as the dollar climbed after weaker Chinese trade data, while caution in the run-up to U.S. inflation readings this week also kept appetite for zero-yield bullion subdued. Spot gold was down nearly 0.6% at $1,925.19 per ounce, while U.S. gold futures fell about 0.6% to $1,958.80.
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