Dow futures indicated an opening gain of more than 100 points, while futures contracts for the S&P 500 and Nasdaq 100 also traded in positive territory.
The Nasdaq Composite dipped 2.1%, pushed lower by losses in Netflix, Microsoft, Amazon and Facebook. The technology-heavy index rose nearly 2% at its session high on Monday.
The Nasdaq-100, which is made up of the 100-largest nonfinancial companies in the Nasdaq Composite, briefly traded above 11,000 for the first time before falling 2.2%.
“I think what we’re seeing here is the ongoing push-pull between the rising cases of coronavirus versus the states reopening the economies and the market is grappling with the balance and how that will work out over time,” Susan Schmidt, head of U.S. equities at Aviva Investors, told CNBC.
Earlier in the session on Monday stocks were helped by news that Pfizer and German biotech BioNTech SE were granted fast track designation by the Food and Drug Administration for two of the companies’ four vaccine candidates against the coronavirus.
Cases continued to hit record levels across the U.S. over the weekend as a number of hot-spot states continue to see Covid-19 deaths gradually rise, according to data compiled by Johns Hopkins University. California Gov. Gavin Newsom is ordering some indoor businesses — including restaurants, bars, movie theaters and museums — to reclose statewide as new cases continue to rise.
Sentiment on Wall Street also got a boost when Pepsico reported better-than-expected earnings on Monday.
Bank earnings kick off on Tuesday with Citigroup, JPMorgan Chase and Wells Fargo all set to report before the opening bell.
While corporate profits are expected to fall by 44% in the second quarter, the financial sector is expected to see a more than 52% decline in profits, according to Refinitiv.
“What’s so influential about the banks reporting early in the earnings season in times like these is we’re really counting on banks’ management team’s view on what’s going on,” Schmidt added. “Banks are the foundation of our U.S. economy. They are there to provide loans to small businesses and to manage the retail consumers’ deposits.”
Delta Air Lines and Fastenal also report quarterly earnings results on Tuesday.
A key indicator of inflation trends, the consumer price index will be released by the Labor Department at 8:30 a.m. ET. Economists polled by Dow Jones estimate U.S. consumer prices rose 0.5% in June, according to economists polled by Dow Jones.