US pre-open: Stocks seen lower ahead of Boeing, Tesla earnings

(Sharecast News) - US futures pointed to a weaker open on Wall Street on Wednesday as investors eyed earnings from the likes of Boeing, Tesla and Coca-Cola. At 1115 BST, Dow Jones Industrial Average futures were down 0.5%, while S&P 500 and Nasdaq futures were 0.2% and 0.3% lower, respectively.

Kathleen Brooks, research director at XTB, said: "A few key themes are developing this week. The first is a slowdown in stock markets. The main US stock market recorded its first back-to-back loss in weeks on Tuesday, while the Nasdaq eked out a small gain. This week's stock market price action suggests that the 50th record high for the S&P 500 could be a tough ask with the US election so close. European indices are mostly flat to lower, as they have also lost their anchor as we lead up to some key geopolitical risks.

"There are some big US earnings releases later today, including Boeing and Tesla, who will report earnings once the US market closes. These will be watched closely to see if any positive earnings surprises can boost the US blue chip stock market back to its winning ways."

She said the other themes dominating financial markets include a divergence in global bond markets and the Trump trade.

"Looking at bond yields first, US Treasury yields are rising this week, as the market prices out the prospect of two further rate cuts this year," said Brooks.

"The market now expects 42 basis points of cuts by the end of this year, a month ago there were 79 basis points of cuts priced in for the November and December Fed meetings. This is a huge shift and it is driving dollar strength. UK yields are also rising in the lead up to next week's budget. However, European yields are falling, as the market prices in 45 basis points of cuts at the ECB's December meeting."

On the macroeconomic calendar, existing home sales figures for September are due at 1500 BST.

On the corporate front, Starbucks shares slumped 5% in pre-market trade after the coffee chain scrapped its annual guidance as it reported a decline in quarterly sales and earnings.

McDonald's was 7% lower, meanwhile, after the US Centers for Disease Control and Prevention (CDC) said that its quarter pounders were linked to a fatal outbreak of E.coli.