© Reuters.
Investing.com – U.S. futures largely hovered around the flat line on Tuesday, as traders braced for a flurry of earnings, data and central bank decisions this week. Artificial intelligence is expected to be a major focus in the latest quarterly reports from tech giants Microsoft (NASDAQ:) and Alphabet (NASDAQ:) today. Boeing (NYSE:) is dropping a request to expedite official certification of its upcoming 737 Max 7 jet following scrutiny from U.S. lawmakers.
1. The future is muted
U.S. stock futures were subdued on Tuesday as investors awaited the release of new earnings from several big-name companies, a series of key economic data and a key policy decision from the Federal Reserve.
As of 5:30 a.m. ET (10:30 GMT), the contract had lost 44 points, or 0.1%, was down 2 points, or 0.1%, and was mostly unchanged.
Wall Street's major averages rose in the previous session, with the benchmark in particular gaining 0.8% to close at a new record high. The tech-heavy stock gained 1.12% and the 30-stock gained 0.6%.
In individual stocks, shares of iRobot (NASDAQ:) fell 8.8% after the robot vacuum maker and Amazon (NASDAQ:) announced they had mutually agreed to end a proposed merger amid opposition from EU antitrust regulators had. Elsewhere, shares of SoFi Technologies (NASDAQ:) rose 20.2% after the online personal finance company posted better-than-expected quarterly profit.
2. Microsoft and Alphabet's profits are ahead
Tech giant Microsoft and Google parent Alphabet will report their latest quarterly results after trading closes in New York on Tuesday, marking the first wave of potentially market-moving corporate results this week.
For Microsoft, the numbers come after the Redmond, Washington-based company's stock market value surpassed $3 trillion last week for the first time ever.
This sky-high valuation is underpinned by Microsoft's investment in OpenAI, whose ChatGPT chatbot has become one of the focal points of the recent growing enthusiasm for generative artificial intelligence. Analysts will likely pay close attention to comments from company executives about how they plan to use the emerging technology, particularly in its key Azure cloud computing division.
Alphabet, meanwhile, recently launched its own advanced AI game called Gemini. The YouTube owner praised this model as a sophisticated tool for processing different units of information such as video, text and audio. Chief Executive Sundar Pichai called it “one of the largest scientific and engineering efforts we have ever undertaken.”
AI will also be the focus at Advanced Micro Devices (NASDAQ:) when the chipmaker reports results later today after the market closes. Analysts raised their price target for the semiconductor company earlier this month, citing the benefits of increased demand for AI-based chips.
3. Boeing withdraws application for safety exemption for 737 Max 7
Boeing has confirmed it is withdrawing its request for a safety exemption for a new series of its popular 737 Max planes as the plane maker grapples with the ongoing fallout from a dangerous mid-air door plug break earlier this month.
The exemption would have allowed US regulators to speed up the approval process for Boeing's upcoming 737 Max 7. Investors had widely expected it to receive an official green light in the first half of this year.
The timeline for the much-anticipated certification of both the Max 7 and Boeing's larger Max 10 is now more in doubt. According to Reuters, the company may be forced to introduce design changes faster than originally planned.
Boeing's decision also came after the company faced intense pressure from U.S. lawmakers last week to withdraw its request for an exemption. U.S. Senator and Aviation Subcommittee Chair Tammy Duckworth was particularly vocal in her opposition to the request, arguing that it could have “catastrophic consequences for passenger safety.”
4. BYD shares slide after disappointing earnings forecast
BYD (SZ:), the Warren Buffett-backed group that recently dethroned Tesla (NASDAQ:) as the world's largest electric vehicle (EV) maker by sales volume, forecast a full-year profit that fell short of analysts' expectations and the sent shares lower on Tuesday.
The Chinese electric vehicle company said it now expects annual profit of between 29 billion yuan and 31 billion yuan, up up to 86.49% from a year earlier. However, the pace would be far slower than 2022's 446% net income growth.
Analysts at Nomura noted the outlook was 4% to 10% below their forecasts, the Wall Street Journal reported, citing a research note.
BYD noted that the company faces “tough competition” in China's electric vehicle industry, which has contributed to an intensifying price war among domestic automakers desperate to lure cost-conscious consumers. Still, the Shenzhen-based company said it had demonstrated “strong resilience” to these pressures, adding that it had been strengthened by the “rapid” expansion of overseas sales and cost reductions in its supply chain.
5. Crude oil prices rise amid tensions in the Middle East
Oil prices rose slightly on Tuesday after losses in the previous session, as escalating geopolitical tensions in the Middle East fueled supply concerns.
At 5:01 a.m. ET, the futures contract was trading 0.5% higher at $77.13 a barrel, while the contract was up $82.15 a barrel.
Crude oil markets are tense after the US vowed to take “all necessary measures” to defend its troops following a deadly drone attack in Jordan by Iran-backed militants that could potentially lead to regional energy supply disruptions in the oil-rich Middle East.
Crude oil contracts fell above $1 on Monday as a worsening housing crisis contributed to concerns about demand from China, the world's biggest crude consumer.
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