S&P 500 closes 1% lower, Nasdaq sheds 1.7% on Wednesday amid corporate profit worries
U.S. stocks slid Wednesday as investors returned focus to the latest batch of corporate earnings. Wall Street also continued to weigh the outlook for future Federal Reserve policy moves.
The Dow Jones Industrial Average fell by 207.68 points, or 0.61%, to 33,949.01. The S&P 500 slid 1.11% to end at 4,117.86 . The Nasdaq Composite dropped 1.68% to close at 11,910.52.
Chipotle slid roughly 5% after missing expectations on the top and bottom lines in its latest results. Lumen Technologies tumbled nearly 21% after it reported a fourth-quarter loss of $3.1 billion and gave guidance for the year that was under Wall Street expectations.
Meanwhile, CVS and Uber each gained more than 3% and 5% on the back of earnings that came in above Wall Street estimates.
For the first quarter of 2023, 42 companies in the S&P 500 have issued negative earnings guidance, according to Refinitiv. Meanwhile, eight have issued positive guidance, while many others have not changed their guidance or issued any to begin with. That's a higher share of companies with negative expectations than the historical average, Refinitiv reported.
Around 69% of the 297 S&P 500 companies that have reported fourth-quarter earnings so far beat analysts' estimates, Refinitiv said, though many analysts lowered their expectations for the quarter amid rising concerns about the health of the economy. Just over 27% missed analyst consensus estimates for the quarter.
"This earnings season was subpar at best," said Eric Sterner, CIO at Apollon Wealth Management. "It takes time for these rate hikes to affect earnings. Now, we're starting to see that."
Investors are looking to post-bell earnings from companies including Walt Disney and Mattel to gauge if there are any signs of slowing consumer spending or a weakening economy.
Unrelated to earnings, Google-parent Alphabet tumbled more than 7% amid concerns of rising competition in the artificial intelligence space.
The move lower marks a turn from Tuesday's rally, which was mainly driven by Fed Chair Jerome Powell's remarks that inflation has started easing. His comments reiterated those given at his press conference last week, further bolstering investor hopes that the central bank will soon pause or pivot on interest rate hikes.
"It's the continued kind of yin-and-yang, if you will, with, 'Which way are we going with the Fed?,'" said Sal Bruno, CIO of IndexIQ. "We should expect a lot of choppiness."
Stocks close down
The three major indexes finished Wednesday's session down.
Leading the three indexes down was the Nasdaq Composite, which slid 1.7%. The S&P 500 followed, losing 1.1%
The Dow performed the best of the three, but still dipped 0.6%.
— Alex Harring
Luxury shoppers pull back on goods spending, Barclays says
Goods spending from higher-end shoppers have fallen "sharply," while goods spending from discount shoppers remain resilient, according to Barclays.
"We show that high-end shoppers are pulling back on goods spending as implied by US Barclays credit card transactions data," read a Tuesday note. "This appears in year-on-year growth, but also in seasonally adjusted month-on-month growth."
Year over year total spending growth from luxury shoppers has dropped to negative territory since around October, according to the firm. Recently, those declines accelerated, with year over year growth falling 7%, as of Jan. 25.
In contrast, goods spending held up among discount shoppers over the last quarter, "with slightly negative y/y growth over the end of November and December, but a return to positive growth in the new year."
The firm identified luxury consumers as shoppers at higher-end retailers such as Williams-Sonoma, Neiman Marcus, Bloomingdale's and more. Meanwhile, discount shoppers make purchases at retailers such as Dollar General, Family Dollar and Ross Stores, among others.
To be sure, Barclays noted that many credit card users do not fall into either category, as they shop at retailers from both groups, or do not make purchases from either group at all.
— Sarah Min
Chipotle's long-term growth thesis remains 'intact' despite disappointing earnings
Analysts remain optimistic about the long-term trajectory for Chipotle Mexican Grill despite the burrito chain's top-and-bottom line miss.
Chipotle on Wednesday attributed the fourth-quarter miss to customers easing spending, and cited underperforming limited-time menu items along with tough comparison's to last year's brisket launch. Same-store sales growth also fell short, rising just 5.6%. That's below StreetAccount's 6.9% estimate and Chipotle's own October forecast.
But while the fourth-quarter miss may weigh on shares near term, easing inflationary pressures and unit growth acceleration present a weakness in shares that investors should buy into, said Citi analyst Jon Tower.
"Importantly, despite a challenging near-term macro, the long-term growth thesis is intact," wrote Barclays' Jeffrey Bernstein in a Wednesday note.
Bernstein added that he believes that long-term Chipotle can generate greater than 20% annual earnings per share growth, helped by accelerating unit growth, new product launches and a compelling value proposition.
Analysts also pointed to recent sales comps data as a sign that the company is off to a decent 2023, with data already showing a reacceleration in January.
Credit Suisse's Lauren Silberman reiterated her conviction in the company long-term trajectory, calling it a "rare compounding growth story" offering investors a solid risk-reward.
Shares fell 5% Wednesday but are still up about 18% in 2023.
— Samantha Subin
Stocks remain down entering final hour
The three major indexes remained in the red as investors entered the final hour of trading.
The Nasdaq Composite led the way, dropping 1.5%. The S&P 500 and Dow followed, sliding 0.9% and 0.5%, respectively.
— Alex Harring
Disney shares have more than a 25% upside, according to Daiwa
Walt Disney is punching above its weight in profitability, according Daiwa, and has an upside of 25.6% in 2023.
The company's improving streaming unit, Disney+, as well as an likely uptick in theme park visitors suggest outperformance in price-to-earnings, according to Daiwa analyst Jonathan Kees.
"We see DIS positioned for strong earnings growth and cash generation over the next couple fiscal years and beyond," Kees wrote in a client note on Wednesday.
The company will announce its quarterly earnings announcement after the bell on Wednesday.
— Hakyung Kim
Morgan Stanley upgrades American Express, cites higher-income customer base
Morgan Stanley upgraded American Express to overweight from an equal weight rating, noting its higher-income customer.
"AXP has a lower risk credit skew with higher FICO card members (5% subprime vs. peer median of ~20%), and we see credit losses hitting pre-COVID levels only by 2024 while all other card peers will overshoot on deterioration," wrote analyst Betsy Graseck.
Read more on the upgrade here.
— Samantha Subin
Fed Governor Waller on interest rate hikes: 'We have farther to go'
Fed Governor Christopher Waller on Wednesday talked tough on inflation, warning that the fight is not over and could result in higher interest rates than markets are anticipating.
Speaking to an agribusiness conference in Arkansas, Waller said the January jobs report, showing nonfarm payroll growth of 517,000, indicated that the employment market is "robust" and could fuel consumer spending that would maintain upward pressure on inflation.
Consequently, he said the Fed needs to maintain its current plan of action, which has seen eight interest rate hikes since March 2022.
"We are seeing that effort begin to pay off, but we have farther to go," Waller told the Arkansas State University Agribusiness Conference in prepared remarks. "And, it might be a long fight, with interest rates higher for longer than some are currently expecting. But I will not hesitate to do what is needed to get my job done."
The comments come a week after the rate-setting Federal Open Market Committee approved a quarter percentage point increase that took the benchmark borrowing rate to a target range of 4.5%-4.7%, the highest since October 2007.
— Jeff Cox
Health care is sole S&P 500 sector trading up
Health care is the only sector of 11 to buck the broader S&P 500's downturn.
Despite the broader index trading down around 0.7%, the sector gained a modest 0.1%.
Here's where the 10 in the red stand, in order from best to worst performance:
- Financials (-0.1%)
- Industrials (-0.2%)
- Real estate (-0.3%)
- Materials (-0.3%)
- Energy (-0.6%)
- Consumer staples (-0.6%)
- Information technology (-0.6%)
- Consumer discretionary (-0.8%)
- Utilities (-1.8%)
- Communication services (-3.8%)
The worst performer, communication services, was weighed down by slides of 20.6% in Lumen Technologies and 7.6% in Alphabet.
— Alex Harring
Stocks making the biggest moves in midday trading
These stocks are among those making the biggest moves in midday trading:
- Lumen Technologies — Shares fell 22.5% after the cloud network data company reported a fourth-quarter loss of about $3.1 billion. Its earnings guidance for the year also came in below StreetAccount estimates.
- Alphabet — Shares of Google's parent company dropped 7.5% after the company held an event to show off its new artificial intelligence chatbot called Bard, one day after competitor Microsoft held an event to show off AI technologies in its competing search engine.
- CVS Health — CVS Health gained 4.6% after the company surpassed profit and sales expectations in its latest quarterly results. The pharmacy operator reported earnings of $1.99 per share on revenue of $83.8 billion. Analysts polled by Refinitiv were forecasting earnings of $1.92 per share on revenue of $76.21 billion. Separately, CVS Health said it would acquire primary care company Oak Street Health in a transaction valued at $10.6 billion.
- Fortinet — The cybersecurity company jumped 10.8% after it beat analysts' earnings expectations for the most recent quarter. Fortinet posted earnings of 44 cents per share, while analysts expected 39 cents per share, according to StreetAccount.
Click here to see more stocks making midday moves.
— Pia Singh
Evercore ISI takes Cisco to outperform rating
Evercore ISI upgraded Cisco Systems to an outperform rating, citing potential for greater sales and earnings-per-share growth in 2023 as supply chains normalize.
"We would note CSCO is positioned to drive not just revenue strength but also translate that upside to the bottom-line driven by cost reduction and operating leverage," the firm wrote in a note to clients on Wednesday. The technology company has long been regarded as an economic bellwether considering the breadth of its customer base.
The firm said Cisco should benefit from the stabilizing networking demand with enterprise customers and service providers, given that the company leans towards enterprise customers. Evercore ISI analysts also expect Cisco's shares to gain from minimal backlog cancellations and easing supply chains, which would benefit product procurement and delivery.
Evercore ISI gave Cisco a $58 price target, suggesting shares could gain more than 21% from Monday's close. Shares are down 1.7% so far this month, but up more than 6% in the last 6 months.
— Pia Singh
Barclays initiates coverage of Walmart with an overweight rating
Barclays initiated coverage of Walmart on Tuesday with an overweight rating, citing the retailer's defensive characteristics that will allow it to weather the short term, as well as several incremental growth drivers.
Those drivers include Walmart's initiatives around service, assortment and convenience, which have positioned the company to gain share and widen its consumer reach, analyst Seth Signman said in a note.
"In an environment where competition heats up as demand slows and cost pressures ease, WMT should be best positioned," he wrote.
Barclays' price target of $159 per share implies nearly 13% upside from Tuesday's close.
— Michelle Fox
Alphabet shares fall as Microsoft A.I. competition heats up
Alphabet shares tumbled more than 8% Wednesday, less than a day after new AI tools announced by Microsoft boosted Wall Street's confidence in search engine Bing's ability to take share from Google.
On Wednesday, Alphabet held its own event, geared toward its new artificial intelligence chatbot known as Bard.
The events from the competing technology giants come as the race to build the next big artificial intelligence innovation heats up in the wake of ChatGPT's showstopping launch.
While capturing share could take time to settle in, analysts are bullish that those gains will come long term.
Wells Fargo's analyst Michael Turrin saying in a Tuesday note that the AI-powered updates "will help drive share gains in search, browser & advertising and support AI-enabled innovation across MSFT's product portfolio."
In a note to clients Tuesday, JPMorgan's Mark Murphy said that Microsoft is beginning to "harvest years of prescient AI investments." This should position the company to take share, specifically within the advertising market.
"In summary, we continue to see Microsoft as the best house in a temporarily deteriorating neighborhood, while the fundamental trends of modernization and automation remain intact long-term," he wrote.
— Samantha Subin
Dow hits 200 points down
The Dow traded 200 points down as investors dissected the latest corporate earnings.
That equates to about 0.6% down. The S&P 500 and Nasdaq Composite, meanwhile, dropped 1.1% and 1.6%, respectively.
— Alex Harring
Eight stocks in S&P 500 at fresh 52-week highs — four at all-time records
Eight stocks in the S&P 500 hit new 52-week highs on Wednesday, with four of them at all-time highs.
Here's the list of S&P 500 stocks at 52-week highs:
- Omnicom Group (OMC), all-time high
- Progressive (PGR), all-time high back to its 1971 IPO
- Hologic (HOLX), all-time high back to its 1990 IPO
- Eaton Corp (ETN), highest since January 2022
- Ingersoll-Rand (IR), highest since January 2022
- TransDigm Group (TDG), all-time high back to its 2006 IPO
- CDW Corp (CDW), highest since January 2022
- Fiserv (FISV), highest since September 2021
Other notable highs outside the S&P 500 on Wednesday included:
- Interactive Brokers Group (IBKR), all-time high back to its 2007 IPO
- Primerica (PRI), highest since November 2021
- Encompass Health (EHC), highest since August 2021
- Voya Financial (VOYA), highest since January 2022
- Oak Street Health (OSH), highest since December 2021
- Penumbra (PEN), highest since January 2022
- HEICO (HEI), highest since November 2021
- nVent Electric (NVT), all-time back to 2018 spinoff from Pentair
- Lattice Semiconductor (LSCC), highest since November 2021
- Madison Square Garden Sports (MSGS), highest since November 2021
- Penske Automotive Group (PAG), all-time high back to its 1996 IPO
- Apollo Global Management (APO), highest since January 2022
The following two stocks in the S&P 500 hit 52-week lows:
- Lumen Technologies (LUMN), all-time low back to CenturyTel/Embarq merger that created CenturyLink in 2008
- Jack Henry & Associates (JKHY), lowest since January 2022
— Scott Schnipper, Christopher Hayes
Look how Warren Buffett's Berkshire typically beats the market during recessions
With a massive cash pile and diversified businesses, Warren Buffett's Berkshire Hathaway has a track record of outperforming the market during economic downturns, according to UBS.
The conglomerate has proved to be resilient leading into and through the last three recessions since the early 1990s, the Wall Street firm said after studying performance data. It showed Berkshire shares outperforming the S&P 500 and other financials.
— Yun Li
Insurance stock ETF hits all-time high, led by Prudential
Prudential Financial rallied as much as 4.4% in early trading Wednesday, helping to push the SPDR S&P Insurance ETF to a record high.
Prudential, which reported results after the bell Tuesday, is on pace for its best day since last November.
Also rallying Wednesday were Genworth Financial, up as much as 3.5%, and Primerica, which added 2.1%.
— Scott Schnipper, Gina Francolla
Fed's Williams says looser financial conditions could imply higher interest rates
If financial conditions continue to loosen, the Federal Reserve could be forced to push interest rates higher than expected, New York Fed President John Williams said Wednesday.
By the Chicago Fed's measure, conditions are at their loosest since April 2022. That has come despite eight interest rate hikes from the central bank in its attempt to rein in inflation.
"If financial conditions ... loosened a lot or got much more supportive of growth, that would be a factor that would have to influence our thinking about the future path of the economy and what we need to do in terms of monetary policy in order to achieve our goal," Williams said during a Wall Street Journal roundtable.
Looser conditions "might might imply a higher interest rate to make sure that we're getting to the goals that we're trying to achieve," he added.
As things stand, he said projections in December of a fed funds rate in the 5%-5.5% range are probably accurate, implying increases of another 0.5 percentage point or so from the current level.
Wholesale inventories for December up 0.1%
U.S. wholesale inventories for December rose by just 0.1% from the revised November level, the Commerce Department said Wednesday. That's the lowest month-over-month change since July 2020.
Total adjusted inventories of merchant wholesalers, except sales branches and offices, came in at $932.9 billion, up 17.6% from December 2021.
December's data also came in line with the consensus estimate of economists polled by Dow Jones.
— Michelle Fox
Stocks open lower
The three major indexes opened lower as trading kicked off.
The Dow was down 39 points, or 0.1%, after the first 15 minutes of trading. The S&P 500 and Nasdaq Composite were each down around 0.2%.
Wednesday's open follows a winning day for the three indexes on Tuesday.
— Alex Harring
Bank of America double upgrades Tripadvisor as consumers book experiences
Shares of Tripadvisor surged more than 6% Wednesday after Bank of America double-upgraded shares to a buy from an underperform rating.
The bank cited improving travel demand and a desire among consumers to book more experiences. Bank of America also upped its price target to a level that suggests shares could gain nearly 60% from Tuesday's close.
Read more on the call from Bank of America here.
— Samantha Subin
Stocks making the biggest premarket moves
Here are some of the stocks making the biggest moves before the bell.
- Chipotle Mexican Grill — Shares of the fast casual restaurant chain fell more than 5% on the back of disappointing quarterly results. Chipotle said it saw customers pull back on their restaurant spending during the fourth quarter. "As we got around the holidays, we just didn't see that pop, that momentum, that we normally see," CFO Jack Hartung said on a conference call.
- Enphase Energy — The solar company rose 8.5% after it posted fourth quarter adjusted earnings of $1.51 per share vs a $1.27 estimate, on revenue of $725 million against a $707 million estimate, according to StreetAccount.
- Lumen Technologies — The cloud network data company lost 17% premarket after reporting a fourth quarter loss of $3.1 billion (including a $3.3 billion goodwill writedown), and adjusted EPS of 43 cents vs 51c a year ago. This year's adjusted earnings guidance missed StreetAccount estimates.
Read more about the morning's biggest movers here.
— Hakyung Kim
Under Armour rises 6% following earnings beat, guidance lift
Under Armour shares rose 6% after the retailer beat Wall Street expectations for its holiday quarter and raised its guidance for the fiscal year.
The retailer posted adjusted earnings per share at 16 cents, above the 9 cents expected by analysts polled by Refinitiv. It also slightly beat the consensus analyst estimate on revenue, bringing in $1.58 billion compared with the $1.55 billion expected.
For the fiscal year, Under Armour raised where it expects it per-share earnings to come in to between 52 cents and 56 cents from between 44 cents and 48 cents.
Still, the retailer is among many struggling to move gluts of inventory as consumers shift spending to services and feel their pocketbooks pinched by inflationary pressures.
— Alex Harring, Gabrielle Fonrouge
Mortgage refinance demand rises as interest rates fall
Mortgage rates continued to fall last week, and both current homeowners and potential homebuyers reacted swiftly.
Total mortgage application volume, including refinances and loans to purchase a home, jumped 7.4% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.18% from 6.19%, with points falling to 0.64 from 0.65 (including the origination fee) for loans with a 20% down payment. That rate was 3.83% the same week one year ago.
— Diana Olick
Uber jumps 7% on better-than-expected earnings
Uber advanced more than 7% before the bell after its fourth-quarter earnings came in above analyst expectations.
The rideshare company posted per-share earnings of 29 cents, outperforming an expected loss of 18 cents from analysts polled by Refinitiv. Uber also beat the $8.49 billion expectation for revenue, bringing in $8.6 billion in the quarter.
CEO Dara Khosrowshahi said in a prepared statement that the company had its "strongest quarter ever" to cap off its "strongest year."
— Ashley Capoot, Alex Harring
Morgan Stanley upgrades American Express
Morgan Stanley upgraded American Express to overweight from equal weight, saying that credit losses pose less of a risk given the company's higher credit score customers.
"AXP has a lower risk credit skew with higher FICO card members (5% subprime vs. peer median of ~20%), and we see credit losses hitting pre-COVID levels only by 2024 while all other card peers will overshoot on deterioration," she said in a note to clients Wednesday.
— Samantha Subin
Wells Fargo hikes Goldman Sachs price target
Wells Fargo analyst Mike Mayo hiked his price target on Goldman Sachs, noting the stock is undervalued relative to its peers.
"GS isn't getting credit for expected '23 and '24 returns that are below target and could have greater upside if targets are achieved," Mayo said, noting that a new analysis of return on tangible equity to price-to-tangible book positions Goldman Sachs as 19% undervalued relative to peers.
Goldman shares are up 9% for the year, slightly outperforming the S&P 500.
— Samantha Subin
Maersk, a global barometer for trade, posts record 2022 earnings but warns of a tough year ahead
Maersk, one of the world's largest container shipping firms, on Wednesday reported a fall in fourth-quarter earnings but posted the best full-year result in its history.
The Danish giant, widely seen as a barometer for global trade, said its earnings before interest, taxes, depreciation and amortization (EBITDA) reached $6.5 billion in the fourth quarter, below a Refinitiv consensus analyst forecast of $6.77 billion and down from $8 billion for the same quarter of 2021.
This took the full-year underlying EBITDA figure to $36.84 billion, fractionally below the company's forward guidance of $37 billion but its strongest-ever full-year result.
Yet for 2023, Maersk expects underlying EBITDA to plummet to between $8 billion and $11 billion.
It said the guidance was based on the "expectation that inventory correction will be complete by the end of H1 leading to a more balanced demand environment, that 2023 global GDP growth remains muted, and that the global ocean container market will grow in a range of -2.5% to +0.5%."
— Elliot Smith
Biden, Republicans seem to agree on preserving Social Security, Medicare benefits
Biden seemed to get Republicans to agree on not touching the Social Security and Medicare funds when they look to cut spending.
Republicans shouted back at the president when he said some House GOP members had proposed to reduce funding to the programs.
"Okay folks, as we all apparently agree, Social Security and Medicare is off the books now," Biden shouted back.
"If anyone tries to cut Social Security, which apparently no one's going to do, I'll stop it. I'll veto it," Biden said. "Apparently it's not going to be a problem."
— Emma Kinery
Chipotle shares fall after earnings
Chipotle Mexican Grill shares fell more than 4% in extended trading after the restaurant chain missed quarterly earnings and revenue expectations.
Chief Financial Officer Jack Hartung said during the company's conference call that Chipotle "didn't see that pop, that momentum" that it typically gets around the holidays, ending the quarter "soft."
— Amelia Lucas, Sarah Min
Ebay plans to lay off 500 employees; shares gain
Ebay plans to lay off 500 employees, which is about 4% of its workforce, according to a Tuesday filing with the SEC. The e-commerce stock rose slightly in extended trading, up 0.3%.
In a memo to employees, CEO Jamie Iannone said management took a "thoughtful look" at the company with regards to macroeconomic environment, saying the layoffs will boost eBay's ability to deliver better experiences for its customers.
— Ashley Capoot, Sarah Min
Stocks making the biggest moves after hours
Here are three names making headlines Tuesday after hours:
- Chipotle Mexican Grill — Shares fell more than 4% in extended trading after Chipotle Mexican Grill missed analysts' expectations on the top and bottom lines. The burrito chain reported earnings of $8.29 per share on revenue of $2.18 billion. Analysts polled by Refinitiv were anticipating earnings of $8.90 per share on revenue of $2.23 billion.
- Lumen Technologies — Shares plunged more than 16% after Lumen Technologies reported its latest results. The company offered 2023 guidance on adjusted earnings before interest, taxes, depreciation, and amortization that was lower than analysts' expected, according to FactSet/ The telecommunications company topped per-share earnings and sales expectations, according to consensus estimates from Refinitiv.
- Fortinet — Shares surged more than 11% in extended trading after Fortinet surpassed earnings per share expectations, according to StreetAccount. The cybersecurity company posted 44 cents per share, greater than the expected 39 cents per share. However, the cybersecurity company slightly missed revenue estimates, posting $1.28 billion, lower than the predicted $1.3 billion.
Check out the full list here.
— Sarah Min
Former NEC chief economist says near-term economic downturn is likely
Joseph LaVorgna, the former chief economist of the National Economic Council, said he sees economic activity taking a further dip this spring before long-term rates eventually come down, as the Federal Reserve continues its interest rate-hike campaign.
"The data suggests that a recession could literally start any quarter…A downturn this spring is very on track in my view," he said on CNBC's "Fast Money."
LaVorgna added that the market is indicating the Fed is too tight, citing an "extraordinarily" inverted yield curve that entails short-term interest rates being higher than long-term rates. Treasury yields reversed earlier declines after Powell's remarks on Tuesday. The 10-year yield is now up to 3.679%, while the rate on the 2-year is 4.466%. If the curve inverts even more, LaVorgna said that would suggest the possibility of a "deeper and more prolonged" recession.
"The Fed should be now focused on growth and should be focused on where it thinks the economy is going... they compounded one mistake by being asleep at the switch with now another mistake of thinking they're going to keep rates on hold for most of 2024," said LaVorgna, who is now the chief economist at SMBC Nikko Securities America, Inc.
— Pia Singh
State of the Union may not move future markets, some say
Markets observers said President Joe Biden's State of the Union scheduled for 9 p.m. EST likely won't move equities. But they still said geopolitical themes are important to follow as they could impact the market down the road.
"I don't really think that tonight's State of the Union address will really play much into the markets," said Sam Stovall, chief investment strategist at CFRA Research.
Stovall said Biden could address the debt ceiling, but that likely won't be an issue the market takes notice of until May.
Others said it could be important for how the next presidential election shapes up.
"State of the Union might not be market moving but it will be important as it will set expectations on how Biden's potential re-election campaign will go," said Ed Moya, senior market analyst at Oanda. "President Biden has the economy in much better shape than a year ago, but only 36% approved how he has handled it."
Follow along with CNBC's live coverage of Biden's address and the run-up to it here.
— Alex Harring
Stock futures open lower
U.S. stock futures fell slightly on Tuesday night.
Dow Jones Industrial Average futures fell by 58 points, or 0.17%. S&P 500 and Nasdaq 100 futures dipped 0.19% and 0.2%, respectively.
— Sarah Min