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Futures up: Dow 0.23%, S&P 0.37%, Nasdaq 0.68%
April 18 (Reuters) - U.S. stock index futures rose on Tuesday as investors braced for a busy day of earnings, with sentiment tempered by signs of uneven economic recovery in China and prospect for more interest rate hikes by the Federal Reserve.
Goldman Sachs Group Inc , Bank of America Corp and Bank of New York Mellon Corp are among financial companies set to report before the bell. Their shares rose in the range of 1.0% to 1.7% premarket. Investor expectations have been buoyed by strong results from big banks including JPMorgan Chase & Co last week. Among other big names, Johnson & Johnson rose 0.2% ahead of the healthcare company's results.
Analysts have marginally brightened their outlook for first-quarter results. They see quarterly profits at S&P 500 companies to have declined 4.8% from the year-ago period, according to Refinitiv data on Friday, from a 5.2% decline forecast at the start of the earnings season. "While we are less concerned about the Q1 results given the subdued expectations and the fact that hard data in Q1 is still generally holding up, the focus of investors will rather be on forward guidance," said Mathieu Racheter, head of equity strategy research at Julius Baer. "Current consensus estimates still point to a recovery in earnings growth and profit margins from Q3 onwards. We maintain our defensive tilt but continue to see an opportunity to load up on quality growth names at attractive valuations." The CBOE Volatility index , also known as Wall Street's fear gauge, slipped to 16.8, its lowest since January 2022. The main Wall Street indexes have traded in a tight range since earnings season kicked off but remain close to two-month highs on expectations that the Fed is nearing the end of its monetary tightening cycle.
Mixed economic data recently has supported bets the Fed will hike interest rates by 25 basis points in May and hit pause before cutting rates in the back half of the year.
Investors lifted bond allocations in April to the highest since March 2009 and kept cash levels at an elevated 5.5%, deterred by worries about a credit crunch, hawkish central bank action and concerns over the economy, a BofA survey showed. At 5:55 a.m. ET, Dow e-minis were up 80 points, or 0.23%, S&P 500 e-minis were up 15.25 points, or 0.37%, and Nasdaq 100 e-minis were up 90 points, or 0.68%. Nvidia Corp gained 2.1% after HSBC upgraded the chipmaker's stock to "buy" from "reduce", surprised by its pricing power on artificial intelligence (AI) chips. Alibaba Group Holding climbed 2.3% after Reuters reported Chinese regulators are expected to fine Ant Group about a quarter less than the more than $1 billion initially planned and downgrade their charges against it. Other U.S.-listed Chinese stocks such as JD.com and Baidu Inc rose marginally after data showed China's economy grew at a faster-than-expected pace in the first quarter, although headwinds from a global slowdown point to a bumpy ride ahead. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
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