US stocks struggle to build on recent gains, focus shifts to earnings season

Major US equity indices struggled to build on recent gains and witnessed a lacklustre opening on Friday as investors assessed the first batch of corporate earnings reports.

Second-quarter earnings season, which kicked off with results from big-banks – JPMorgan, Wells Fargo and Citigroup, will be looked upon to see if fundamental are strong enough to withstand uncertainties arising out of trade policies.  

With expectations already running high, corporate earnings will play an important role in driving focus away from political headlines and determining the next leg of a directional move for the markets.

Meanwhile, today’s subdued action comes after Thursday strong session, which was partially driven by signs that the world’s two largest economies are willing to resume trade talks and end in a bilateral agreement to avoid a trade war.

Nevertheless, as on Thursday’s close, tech-heavy Nasdaq Composite Index was on track for a 1.8% gains for the week, while the broader S&P 500 Index eyed a 1.4% rise and the blue-chip Dow Jones Industrial Average was set for a weekly advance of 1.9%.