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Tesla falls on China-made EV sales drop in April

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Walt Disney ( DIS ) falls on weaker TV business in Q2

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Futures: S&P 500 flat, Nasdaq 100 down 0.19%, Dow up 0.07%

(Updated at 07:20 a.m. ET/ 1120 GMT)

By Sruthi Shankar and Shristi Achar A

May 7 (Reuters) - Futures tracking U.S. stock indexes

were largely muted after Walt Disney ( DIS ) slipped following

second-quarter results, while expectations of the Federal

Reserve's interest rate cuts this year lent support to the

market.

Walt Disney ( DIS ) fell 6.2% in premarket trading, as a

surprise profit in its streaming entertainment division was

eclipsed by a drop in its traditional TV business and weaker box

office.

"Corporates' earnings continue to beat expectations, but

share price action has remained neutral post earnings beats,"

Nicole Inui, head of equity strategy, Americas at HSBC said in a

note.

"Going forward, we expect the market to turn its focus more

on earnings as the volatility around interest rate expectations

subsides."

Kenvue ( KVUE ) gained 3.2% after the Band-Aid maker beat

first-quarter profit estimates and said it would cut 4% of its

global workforce.

The three main U.S. stock indexes closed at their strongest

level in more than three weeks on Monday, after a

weaker-than-expected labor market report last week fueled bets

that the U.S. central bank will ease monetary policy later this

year.

The report and better-than-expected earnings reports helped

soothe jittery investors, who sent markets lower in April, on

concerns that sticky inflation and a robust economy would prompt

the Fed to keep rates higher for longer

Of the nearly four-fifth of the S&P 500 companies that

reported first-quarter results through Friday, 76.8% topped

analysts' profit estimates, as per LSEG data. In a typical

quarter, 67% beat earnings estimates.

Traders currently anticipate rate cuts of 45 basis points

(bps) from the Fed by the end of 2024, according to LSEG's

interest rate probabilities app, with the first pivot to a 25

bps rate cut priced in for September and another in December.

The tech-heavy Nasdaq 100 futures dipped on Tuesday as most

megacap and technology firms came under pressure following Apple ( AAPL )

and Tesla updates.

Nvidia ( NVDA ) fell 1.1% after the Wall Street Journal

reported that Apple ( AAPL ) was developing its own chip to run

artificial intelligence (AI) software in data centers.

Apple ( AAPL ) gained 0.6% ahead of an event later on Tuesday where

it is expected to unveil new iPads.

Tesla fell 1.5% after data showed the U.S.

automaker sold 62,167 China-made electric vehicles in April,

down 18% from a year earlier.

At 07:20 a.m. ET, Dow E-minis were up 26 points, or

0.07%, S&P 500 E-minis were mostly unchanged and Nasdaq

100 E-minis were down 35 points, or 0.19%.

Investors will also keep an eye on Minneapolis Fed President

Neel Kashkari's speech later in the day. Richmond Fed President

Thomas Barkin said on Monday finishing the battle against

inflation will likely require a hit to demand, while his New

York counterpart John Williams said that at some undefined point

the U.S. central bank will lower its interest rate target.

Among other stocks, Palantir Technologies ( PLTR ) tumbled

11.8% after the data analytics firm's annual revenue forecast

fell short of analysts' estimates.

(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru;

Editing by Shinjini Ganguli)