U.S. stock futures nudged upward Tuesday morning as investors digested another round of earnings reports and looked beyond Wall Street’s short-term rally to a decade forecasted to deliver slower returns.
S&P 500, Nasdaq, and Dow futures edge higher
Stock futures showed modest gains as trading opened:
- Dow futures: +46 points (+0.1%)
- S&P 500 futures: +0.1%
- Nasdaq 100 futures: +0.2%
The moves followed Monday’s sharp rebound, when the S&P 500 surged 1.5%, snapping a four-day losing streak. The Nasdaq Composite rose nearly 2%, and the Dow Jones gained about 585 points, erasing its Friday losses.
“You have to respect the momentum,” said NewEdge Wealth’s Cameron Dawson on CNBC. “But some chop through August wouldn’t be surprising.”
Key earnings movers: Palantir surges, Hims & Hers tumbles
Investors are closely watching corporate earnings for signs of resilience or weakness in the economy. Highlights include:
- Palantir (PLTR): +5% after Q2 revenue exceeded $1B
- Hims & Hers Health (HIMS): -13% after weak revenue and guidance
- Vertex Pharmaceuticals (VRTX): -14% despite beating earnings expectations
More earnings are on deck today, including Pfizer, Yum! Brands, Fox, and after-hours reports from Snap, AMD, and Rivian.
Economic data on deck
Markets are also bracing for the latest U.S. trade deficit numbers and purchasing data, due out Tuesday morning — both seen as key indicators for Federal Reserve watchers.
Analysts warn: Lower returns likely for the next decade
While stocks have soared in recent years, many analysts are warning that long-term returns may underwhelm. New forecasts from Vanguard, Morningstar, and Goldman Sachs predict annual returns for the S&P 500 between just 3% and 5.3% through 2035.
Key reasons for the caution:
- Valuations are high: The S&P 500’s CAPE ratio stands at 38.7, more than double its historical average
- Market concentration: Just seven stocks (Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, Tesla) make up 34% of the index’s total value
- Historical precedent: Previous peaks in the CAPE ratio — in 1929 and 1999 — were followed by major downturns
What investors can do now
Despite the gloomy projections, experts point to several strategies for long-term investors:
- Value stocks: Often underpriced, they’re projected to return 5.8%–7.8% annually (Vanguard)
- Small-cap stocks: Expected to grow 5%–7% annually over the next decade
- International stocks: Especially in developed markets, they may offer 8%+ annual returns due to lower valuations
“Stocks are one of the few things people don’t like to buy on sale,” said Todd Schlanger of Vanguard. “But it pays to look beyond the headlines.”
Looking ahead
As earnings season rolls on and economic reports trickle in, investors face a classic tug-of-war: short-term gains vs. long-term risks. While markets remain buoyant for now, elevated valuations and rising tariffs could test investor patience in the months — and years — to come.
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