Market Snapshot: Stock market poised to pull back from records as bank earnings arrive

U.S. stock-index futures pointed to a modestly lower open on Thursday, setting the equity market up for a small retreat from record levels as investors digested the first reads of the third-quarter earnings season.

Financial stocks were in focus after both J.P. Morgan Chase & Co. JPM, -0.30% and Citigroup Inc. C, -0.32% released their results, unofficially kicking off a season that analysts expect to be strong and extend the market’s record-setting streak.

J.P. Morgan posted earnings and revenue that beat expectations, although its trading revenue was weak amid a quiet period for markets. Shares dipped 0.4% in premarket trading. Citigroup also reported a higher-than-expected profit, sending shares up 0.6% before the bell.

Both stocks have been strong performers over the past year, with J.P. Morgan up 42% and Citigroup gaining more than 50% over the past 12 months. The S&P 500 is up 19.5% over that same period.

What are the main benchmarks doing?

S&P 500 futures ESZ7, -0.19% slipped by 4.75 points, or 0.2%, to 2,548.25, while Dow Jones Industrial Average futures YMZ7, -0.09%  dipped by 21 points, or 0.1%, to 22,795.00. Nasdaq-100 futures NQZ7, -0.13%  gave up 4 points, or 0.1%, to 6,078.50.

On Wednesday, the Dow industrials DJIA, +0.18%  edged up to an all-time closing of 22,872.89, as the S&P 500 SPX, +0.18%  and Nasdaq Composite COMP, +0.25%  also set records.

The Dow has gained nearly 16% for the year, the S&P is up 14%, and the Nasdaq has risen 23%.

Read: The Dow’s flirtation with 23,000 is a sign of the stock market’s velocity

And see: Investors face ‘mental exhaustion’ in markets where nothing is ‘normal’

What are strategists saying?

“Basic fundamentals are good, companies are making money, and I think the market will be relatively strong throughout earnings season, but I don’t see a huge spike up between now and the end of the year because a lot [of earnings optimism] has been priced in,” said Gary Droz, managing director at MainLine Private Wealth.

Equities have gone an unusually long time without a pronounced pullbacks, with dips of even 3% in short supply. Droz said this was something that merited watching.

“We don’t want to lull ourselves into a complete coma. Anything could trigger a drawdown; markets need to breathe,” he said.

Which stocks look like key movers?

Domino’s Pizza Inc. DPZ, -0.10%  reported earnings and sales that beat expectations.

Read: Bank earnings: ‘Lower for longer’ means buybacks will continue

And see: Third-quarter earnings seen as ‘an easy beat,’ may bring more market records

Telecom AT&T Inc. T, -0.81% retailerJ. Jill Inc. JILL, -2.17%  and networking equipment makerJuniper Networks Inc. JNPR, -1.65%  look on track for down days after each company issued a profit warning late Wednesday.

CarGurus Inc. CARG, +0.00%  is slated to have its trading Nasdaq debut on Thursday after pricing shares of its initial public offering above an expected range. The company helps buyers find deals on new and used cars.

What are other assets doing?

Bitcoin BTCUSD, +8.14%  on Thursday was soaring to new all-time highs above $5,100.

European stocks SXXP, -0.08% were little changed, while most Asian markets closed higher, with Japan’s Nikkei benchmark NIK, +0.35%  finishing at a fresh 21-year high.

Gold futures GCZ7, +0.51%  gained, while oil futures CLX7, -1.64%  pulled back as the International Energy Agency said the world’s crude supply expanded in September on the back of steady U.S. production growth. The ICE U.S. Dollar Index DXY, +0.16% was roughly flat after falling Wednesday as minutes from the last Fed meeting showed some policy makers wondered whether an interest rate rise was needed in December.

What could help drive markets?

Initial weekly jobless claims fell by 15,000 to 243,000 in early October to mark the lowest level in six weeks. Economists polled by MarketWatch had forecast claims to total 250,000.

The producer-price index rose 0.4%, matching consensus expectations.

Check out: MarketWatch’s Economic Calendar

On the Federal Reserve front, Fed Gov. Jerome Powell is due to give a speech about emerging-market economies at 10:30 a.m. Eastern Time in Washington, D.C.

Fed Gov. Lael Brainard, European Central Bank President Mario Draghi and former Fed chief Ben Bernanke are expected to take part in a panel discussion about monetary policy at 10:30 a.m. Eastern in Washington.

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