Futures pause after rally, JPMorgan results draw cheer

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By Sruthi Shankar

(Reuters) – U.S. stock index futures were flat to slightly lower on Tuesday, as investors took a breather following a record rally, even as JPMorgan’s quarterly results set a positive tone for big bank earnings.

The S&P 500 and the Nasdaq indexes set new all-time highs on Monday, helped by bets that the expected Phase 1 U.S.-China trade deal will spur a rebound in global growth and on easing Middle East tensions.

JPMorgan Chase & Co (N:), the largest U.S. bank by assets, rose 1.7% in pre-market trading after its fourth-quarter profit beat Wall Street estimates, driven by strength in its trading business and higher underwriting fees.

Citigroup Inc (N:) and Wells Fargo & Co (N:), also set to report results before market open, rose about 0.8% each.

Analysts expect profits at S&P 500 companies to drop 0.7% for the second consecutive quarter, according to Refinitiv IBES data, largely due to weakness in earnings for energy and industrial companies that have been hit by a prolonged trade war.

China has pledged to buy nearly an additional $80 billion of manufactured goods from the United States over the next two years, plus over $50 billion more in energy supplies, Reuters reported, citing a source briefed on the trade deal expected to be signed on Wednesday.

As the earnings season starts in earnest, investors are hopeful that a resolution to the Sino-U.S. trade war would encourage companies to come up with stronger forecasts.

Delta Air Lines Inc (N:) jumped 4.4% after reporting a better-than-expected quarterly profit, boosted by customers gained from rival airlines’ 737 MAX cancellations.

High-flying stocks Apple Inc (NASDAQ:) , Amazon.com Inc (O:), Microsoft Corp (O:) and Facebook Inc (O:) were all marginally lower after taking the markets to record levels.

Videogame retailer GameStop Corp (N:) dropped 8.1% after cutting its fiscal 2019 outlook for profit and same-store sales, as customers delayed console purchases ahead of new launches.

At 07:18 a.m. ET, were up 4 points, or 0.01%. S&P 500 e-minis were down 2.75 points, or 0.08% and were down 13 points, or 0.14%.

The U.S. Labor Department is expected to release consumer price data at 8:30 a.m. ET, which is likely to remain unchanged at 0.3% in December. Core CPI is also likely to remain unchanged at 0.2% in December.

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