U.S. futures waver as China rout sours sentiment

U.S. futures fluctuated as a rout in Chinese shares weighed on sentiment while investors await the next batch of earnings from some of the world's biggest companies.

Contracts on the S&P 500 and Nasdaq 100 pulled back from session lows. U.S.-listed Chinese stocks including Alibaba Group Holding Ltd. to JD.com Inc. tumbled in premarket trading, with investors spooked by President Xi Jinping's tightening grip on China's ruling party.

While the outlook for interest rates in the U.S. and Europe remains at the center of investors' attention, their focus this week will also be on earnings of megacap technology companies, among the key profit-growth engines for the S&P 500. The five biggest tech firms by revenue -- Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc. -- are projected to report the steepest contraction in earnings in three years, data compiled by Bloomberg show.

“It's clear demand is slowing but so far we've seen pockets of tech like software, cloud computing still being quite resilient,” said Laura Cooper, a senior investment strategist at BlackRock International Ltd., on Bloomberg TV. “We will be watching for any signs of cracks coming through that could put a dent to some of these earnings expectations.”