US STOCKS-Recession fears to weigh on S&P 500, Dow at open

The S&P 500 and Dow were on course to open lower on Tuesday, with investors fretting about the health of the global economy as central banks around the world moving aggressively to tamp down inflation. Traders are awaiting inflation data on Wednesday that is expected to show U.S. consumer prices rose 8.8% in June from a year earlier, marking a fresh four-decade high and adding more pressure on the Federal Reserve to act on soaring prices.

The S&P 500 and Dow were on course to open lower on Tuesday, with investors fretting about the health of the global economy as central banks around the world moving aggressively to tamp down inflation.

Traders are awaiting inflation data on Wednesday that is expected to show U.S. consumer prices rose 8.8% in June from a year earlier, marking a fresh four-decade high and adding more pressure on the Federal Reserve to act on soaring prices. Analysts are also tempering their profit estimates as the earnings season kicks off in earnest this week, with reports from JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co, among others.

"When you're faced with as many inputs as we're going to see this week, with inflation reports, and the kickoff of second-quarter reporting season, it's not unusual for investors to take a risk off attitude," said Art Hogan, chief market strategist at B. Riley. "If, in fact, (earnings) estimates for the second half don't go down and actually go up a little bit, that's going to shed some of the concern that we're slamming on the brakes and the economy is getting into a recession."

Overall S&P 500 earnings are expected to rise 5.7% in the second quarter, compared with the earlier forecast of 6.8%, according to recent IBES data from Refinitiv. A stronger-than-expected jobs report last week cemented expectations for a second straight 75-basis-point rate hike later this month.

Several Fed speakers are scheduled to speak this week and their comments will be parsed for any change in the Fed's hawkish stance on inflation. Exacerbating worries of slowing global growth, several cities in China are adopting fresh COVID-19 curbs from this week to rein in new infections after finding a highly transmissible Omicron subvariant.

All three benchmark indexes ended lower on Monday, after posting solid gains last week, with market leading growth stocks dragging down the Nasdaq.. At 08:29 a.m. ET, Dow e-minis were down 213 points, or 0.68% and S&P 500 e-minis fell 18 points, or 0.47%

Nasdaq 100 e-minis were up 0.5 points, as megacap stocks such as Alphabet Inc and Apple gained ground. PepsiCo Inc raised its full-year revenue forecast, helped by sustained demand for its sodas and snacks, sending the company's shares up 1.2% in premarket trading.

Lordstown Motors Corp rose 3.5% after the electric-vehicle startup named Edward Hightower as its chief executive officer. Gap Inc slid 7.3% after the clothing retailer said its CEO would step down and that its margins would stay under pressure in the second quarter as costs spiral.