S&P 500 futures edge little changed following gains ahead of key Big Tech earnings, as investors take a breather after a solid start to the week and brace for a packed calendar of corporate results, economic data, and a pivotal Federal Reserve decision.
Futures Tread Water After Monday’s Rally
U.S. stock futures hovered near flat levels late Monday, reflecting a cautious mood after equities climbed earlier in the day. Contracts linked to the S&P 500 were little changed, while Nasdaq 100 futures ticked modestly higher. Meanwhile, Dow Jones Industrial Average futures slipped, pressured by weakness in major health insurance stocks.
The muted moves followed a positive regular session in which technology leaders helped lift markets. The S&P 500 added around 0.5%, the Dow climbed more than 300 points, and the tech-heavy Nasdaq Composite advanced as investors positioned ahead of earnings from industry heavyweights.
Health Insurers Slide on Medicare Proposal
After the closing bell, shares of several large health insurers dropped sharply following a proposal from the Centers for Medicare & Medicaid Services to raise Medicare Advantage payments by an average of just 0.09% in 2027—well below Wall Street expectations.
Stocks of Humana, CVS Health, and UnitedHealth Group fell in extended trading, dragging down Dow futures. The modest rate outlook raised concerns about profitability across the sector, given how closely government reimbursement levels are tied to insurers’ margins.
Trade Tensions Add Another Layer of Uncertainty
Adding to the cautious tone, Donald Trump said he plans to raise tariffs on South Korean autos, pharmaceuticals, and lumber from 15% to 25%, citing delays in finalizing a trade agreement. While markets largely shrugged off the comments for now, trade policy remains a background risk as investors assess potential impacts on global growth and corporate earnings.
Big Tech Earnings Take Center Stage
This week marks one of the busiest stretches of earnings season, with more than 90 S&P 500 companies scheduled to report. The spotlight is firmly on the so-called “Magnificent Seven,” including Meta Platforms, Microsoft, Tesla, and Apple.
So far, results have been encouraging. Roughly three-quarters of companies that have reported have topped analyst expectations, according to FactSet, reinforcing optimism that corporate America can maintain momentum despite lingering macroeconomic headwinds.
All Eyes on the Federal Reserve
Beyond earnings, investors are focused on the Federal Reserve’s first policy decision of the year. The Federal Reserve is widely expected to keep interest rates unchanged, but traders will parse officials’ language for hints on when rate cuts could begin. Futures markets continue to suggest the possibility of two quarter-point cuts by the end of 2026.
Economic updates due Tuesday—including consumer confidence and home price data—could also influence sentiment, as markets look for confirmation that growth remains resilient.
Shutdown and Yield Risks in the Background
Some strategists warn that political risks could resurface. Jeremy Siegel of WisdomTree noted that rising odds of a government shutdown could weigh on markets, even as broader equity leadership improves. He also flagged Treasury yields as a potential concern, though he emphasized that stocks would likely face serious pressure only if the 10-year yield were to climb decisively above 5%.
For now, investors appear willing to stay constructive, balancing strong earnings trends against policy uncertainty. With Big Tech results and the Fed decision just days away, markets may remain range-bound—waiting for the next clear catalyst to set direction.
