Stock futures are lower after Friday’s big bank earnings

Stock futures were lower early on Friday as investors turned their attention to big bank earnings after the major averages staged a historic turnaround rally.

Futures for the Dow Jones industrial average fell 110 points, or 0.37%. S&P 500 futures fell 0.4%, while Nasdaq 100 futures fell 0.7%.

JPMorgan Chase, Wells Fargo, Morgan Stanley and Citigroup are all scheduled to report before the hour. US Bancorp and PNC Financial are also on the table along with UnitedHealth.

The reports come a day after the market staged a major comeback. The Dow ended Thursday’s session up 827 points, down more than 500 points. The S&P 500 rose 2.6% to snap a six-day losing streak, and the Nasdaq Composite rose 2.2%.

Moves following release Consumer Price Index, a key US inflation gauge that came in hotter than expected in September. Initially, this weighed on markets as investors braced themselves for the Federal Reserve to continue its aggressive rate hike program. Later, however, they allayed those concerns.

“The best excuse for today’s bounce is ‘selling news’ coupled with very negative sentiment/positioning,” said Ross Mayfield, investment strategist at Baird. “The market has already fallen for six days, making the report a bit risqué, and the September CPI will not change the Fed’s near-term path (which was already very bearish).”

However, persistent inflation remains a problem for the central bank and investors’ concerns about central bank policy tightening.

“The turnaround is a welcome respite for investors, but more clarity is needed as the market remains tight,” said Brian Levitt, global market strategist at Invesco. “The focus is on the pace of inflation and fundamental strength in the jobs market. A market rally will begin when the market believes a pause in central bank tightening is imminent.”

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There is more economic data this week. Retail sales for September will be released at 8:30 am. In the morning, investors look ahead to the latest consumer sentiment figures from the University of Michigan.

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