By Peter Nurse
Investing.com - U.S. stocks are set to weaken at the open Tuesday, with investors on edge as oil futures head lower at speed and as the disappointing earnings season continues.
At 7:15 AM ET (1115 GMT), S&P 500 futures traded 38 points, or 1.4%, lower, Nasdaq futures down 71 points, or 0.8%. The Dow futures contract fell 424 points, or 1.8%.
The price of oil has continued to slump Tuesday, with the front month May WTI contract, due to expire later Tuesday, still weak, although not as low as Monday’s settlement of minus $37.63 a barrel.
The June contract, where most of the volume and open interest lies, is in positive territory, but at 7:15 ET traded 18% lower at $16.71 a barrel, while the international benchmark Brent contract fell 15% to $21.66.
As a result, oil giant Exxon Mobil (NYSE:XOM) shed 3.7% in premarket trading and major rival Chevron (NYSE:CVX) slipped 4.0%. Other oil-related companies including Apache Corp (NYSE:APA), Halliburton (NYSE:HAL), ConocoPhillips (NYSE:COP), Schlumberger (NYSE:SLB) and Occidental Petroleum (NYSE:OXY) were hit even harder.
Elsewhere, the pace of the earnings season picks up, with almost one-fifth of the S&P 500 companies reporting this week.
Shares in IBM (NYSE:IBM) dropped 4.7% premarket after the tech giant reported late Monday its revenue declined 3.4% in the first quarter. The spread of Covid-19 hit software sales heavily in March. The company also pulled its annual guidance.
Shares in Hertz Global (NYSE:HTZ) are seen 4.1% lower premarket after the car rental giant disclosed Monday it will lay off 10,000 employees in North America due to a sharp downturn in its business during the coronavirus pandemic.
Coca-Cola (NYSE:KO) reported on Tuesday that first-quarter earnings and revenue topped expectations, but the soft drink giant withdrew its forecasts for 2020, reporting that global sales volumes have plunged 25% since the start of April. Coca-Cola shares rose 1.4% premarket.
Small businesses could receive even more relief funding from the U.S. government in the near future, with Congress expected to vote later Tuesday on a new $450 billion package.
The economic calendar is a little bare Tuesday, centering mainly around the March existing home sales release, at 10 AM ET.
The American Petroleum Institute’s weekly inventories data for last week are due at 4:30 PM ET, and will likely be of great interest given Monday’s events.
Elsewhere, gold futures dropped 1.5% to $1,686.70/oz, while EUR/USD traded at $1.0830, down 0.3%.