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Futures flat as investors weigh bank results

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(Reuters) - Worries about the balance of monetary policy and growth kept U.S. stock futures flat on Wednesday, subduing the impact of solid results from Bank of America and a boost for chipmakers from Dutch company ASML.

The second largest U.S. lender (BAC.N) reported a better-than-expected quarterly profit as a healthy domestic economy boosted demand for loans. Its shares were trading flat premarket.

Earnings from the big banks JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N) this week have raised concerns that lower interest rates will pressure profits at a time when revenue growth is already slow. Morgan Stanley (MS.N) will wrap up earnings for Wall Street banks on Thursday.

U.S. stock markets have been trending higher since a sharp fall in May that cast doubt on the fate of a decade-long bull market.

Expectations of monetary easing have powered those gains, but a fall in markets last week reflected concerns that global growth outlook may not justify forecasts of several rate cuts by the end of this year.

The key variables for markets in coming days will be data as well as Beijing and Washington’s rhetoric on trade and a flood of second-quarter earnings reports.

Adding some nervousness to markets was a threat from U.S. President Donald Trump to tax another $325 billion worth of Chinese goods.

In latest evidence that trade tensions were hurting businesses, railroad CSX Corp (CSX.O) reported a quarterly profit that missed estimates and lowered its full-year revenue forecast, sending its shares 7.2% lower.

Profit for S&P 500 companies is expected to dip 0.1%, the first quarterly drop in three years, according to Refinitiv IBES data.

Meanwhile, strong quarterly profit from Dutch chip equipment maker ASML (ASML.AS) helped semiconductor makers including Advanced Micro Devices Inc (AMD.O), Micron Technology Inc (MU.O), Intel Corp (INTC.O) and Applied Materials Inc (AMAT.O) rise between 0.4% and 1.6%.

Qualcomm Inc (QCOM.O) jumped 5.6% after the U.S. Justice Department asked a federal appeals court to pause the enforcement of a sweeping antitrust ruling against the mobile chip supplier.

At 7:05 a.m. ET, Dow e-minis 1YMcv1 were up 6 points, or 0.02%. S&P 500 e-minis EScv1 were up 1 points, or 0.03% and Nasdaq 100 e-minis NQcv1 were up 8.75 points, or 0.11%.

In the previous session, bank results and Trump’s comments on trade weighed on the three main Wall Street indexes, easing them from record levels. Hopes of an interest rate cut at the Federal Reserve’s policy meeting, which is two weeks away, have pushed them to all-time highs.

At 8:30 a.m. ET, a U.S. Commerce Department report is likely to show housing starts numbers dropped to 1.261 million units in June from 1.269 million units a year ago.

After markets close, Netflix Inc (NFLX.O) will be the first FAANG company to report results.

Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur

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