Market Snapshot: Pressure set to resume for Wall Street as stock futures pitch lower

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U.S. stock futures indicated a lower start for Wall Street on Monday, as global stocks failed to join a rally that came late last week on the heels of a multi-session rout that left major indexes at their worst weekly finishes since March.

Investors were also waiting for retail sales data and earnings from financials such as Bank of America.

Need to know: Don’t rule out $400 oil if U.S. sanctions Saudi Arabia

How are major benchmarks trading?

Dow Jones Industrial Average futures YMZ8, -0.56%  were down 176 points, or 0.7%, to 25,135, while S&P 500 futures ESZ8, -0.61%  fell 20.65 points, or 0.8%, to 2,747.75. Nasdaq-100 NQZ8, -1.00%  dropped 78 points, or 1%, to 7,094.50.

On Friday, the DJIA, +1.15% Dow Jones Industrial Average DJIA, +1.15% finished the day up 287.16 points, or 1.2%, to 25,339.99, in whipsaw trading. The S&P 500 SPX, +1.42% rose 1.4% to 2,767.13, snapping a six-day losing streak that marked its longest such streak since a nine-day drop that ended in November 2016. The Nasdaq Composite Index COMP, +2.29% rose 2.3%, in its best daily performance since March 26.

But for the week, the Dow is down 4.2%, the S&P lost 4.1% and the Nasdaq fell 3.7%, representing their worst weekly performances since March.

Read: Here’s how much damage has been done to the stock market during a powerful rout

What’s driving the market?

Investors remain spooked after last week’s two-day selloff that at its worst wiped 1,400 points off the Dow, and pushed the Nasdaq toward correction territory. Losses were tied to jitters over a sudden rise in interest rates, as the yield on the 10-year Treasury note TMUBMUSD10Y, -0.39% hit a seven-year high above 3.25% last week. That yield was hovering at 3.15% on Monday.

Higher yields raise borrowing costs for corporations and lure investors away from perceived riskier asset such as stocks. Yields move inversely to price.

Seen as a major driver for stocks in the coming week, third-quarter earnings season gets under way in earnest this week, with Goldman Sachs Group Inc. GS, +0.42%  among the big bank names reporting, while streaming video group Netflix Inc. NFLX, +5.75% will also be a highlight.

Netflix earnings: Was the streaming giant’s second-quarter miss really just a blip?

Geopolitical tensions were another worry for investors, starting with Saudi Arabia, which is locked in a growing diplomatic spat with the U.S. On Sunday, President Donald Trump threatened “severe punishment” for the Saudis if any connection was found between the kingdom and a missing dissident journalist. That country responded with an immediate threat to retaliate, sparking a rally for oil prices, though gains have since pared.

Saudi backlash: GM, J.P. Morgan the latest to drop out of Riyadh conference, but Mnuchin still plans to attend

Need to know: Don’t rule out $400 oil if U.S. sanctions Saudi Arabia

Trump made those comments in a “60 Minutes” interview where he also said the U.S. could slap a third round of tariffs on China, which he said doesn’t “have enough ammunition to retaliate.”

And concerns resurfaced over a no-deal Brexit after the U.K. and the European Union failed to find a compromise on the issue of the Irish border. Both sides were hoping a deal on a withdrawal agreement would be mostly settled ahead of an EU summit starting Wednesday.

Need to know: Don’t rule out $400 oil if U.S. sanctions Saudi Arabia

What data are on tap?

Retail sales for September at due at 8:30 a.m. Eastern Time, along with the Empire State Index for October that tracks manufacturing conditions in the New York area.

What are analysts saying?

Investors need two things to keep buying the dips in the stock market, said Hussein Sayed, chief market strategist at FXTM, in a note to clients.

“One, which is the most important, is corporate profits must remain robust and beat the 20% earnings growth projected for the third quarter while painting a rosy outlook for the quarters to come. Two, the U.S. and China need to cut a deal on trade, said Sayed. “If those two criteria aren’t met, then stocks might have already peaked for 2018.”

What stocks are in focus?

Bank of America Corp. BAC, +0.35%  and Charles Schwab Corp. SCHW, +1.83%  will report results ahead of the open on Monday.

How are other markets trading?

Shares in Asia finished lower, failing to pick up the baton from the U.S. on Friday, led by a 1.9% drop for the Nikkei 225 index NIK, -1.87% Major European indexes were weaker across the board.

Crude-oil prices remained firm on U.S./Saudi tensions, while gold GCZ8, +1.09%  climbed nearly 1%. The U.S. dollar index DXY, -0.25% was flat.

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