Investing.com -- Eli Lilly is due to headline a slew of quarterly returns, with the performance of its all-important diabetes drug in focus. Toyota (NYSE:TM) hikes its full-year profit outlook, sending U.S.-listed shares in the Japanese carmaker higher in premarket trading. Chinese equities gain as the country's top market regulator offers new support measures.
1. U.S. futures mixed
U.S. stock futures traded around both sides of the flatline on Tuesday, with investors gearing up for a fresh batch of corporate results.
By 05:14 ET (10:14 GMT), the S&P 500 futures contract was mostly unchanged, Nasdaq 100 futures had added 28 points or 0.2%, and Dow futures had slipped by 72 points or 0.2%.
The main averages in Wall Street ended the prior session in the red, dragged down by fresh interest rate commentary from Federal Reserve Chair Jerome Powell. In an interview with CBS aired on Sunday, Powell suggested that recently strong economic data gave the Fed more time to wait before starting to bring borrowing costs down from more than two-decade highs.
The statement further tempered waning hopes for an imminent cut, placing upward pressure on U.S. Treasury yields and weighing on equities. Yields tend to move inversely to prices.
2. Eli Lilly earnings ahead
Traders are eyeing a busy week of corporate earnings, which will be highlighted on Tuesday by results from Eli Lilly (NYSE:LLY).
The U.S. drugmaker's weekly diabetes injection Mounjaro will likely be a key focus, particularly after the soaring success of a rival version from Denmark's Novo Nordisk (NYSE:NVO). At stake in this race is dominance in a booming market for weight-loss drugs that is estimated to be worth $80 billion a year by the end of the decade. Novo Holding's -- the parent of Novo Nordisk -- announced on Monday that it would purchase Catalent (NYSE:CTLT) for $11.5B in a bid to bolster its supply of anti-obesity drugs.
Demand is also increasing for Mounjaro, which was approved for weight loss in the U.S. under the brand name Zepbound. The clamor has been so strong that the top American drug regulator warned earlier this week that only limited amounts of three of the higher doses of the shot will be available through early March. Lilly said that other Mounjaro doses are still in stock, adding that it is working to address any potential disruption to people's treatment regimens.
Elsewhere on the earnings calendar, biotech group Amgen (NASDAQ:AMGN), drug manufacturer Gilead Sciences (NASDAQ:GILD), carmaker Ford Motor (NYSE:F), and burrito chain Chipotle Mexican Grill (NYSE:CMG) are due to report after the bell on Tuesday.
3. Toyota lifts full-year income outlook
Toyota has raised its annual profit guidance after solid sales of its higher-margin and hybrid vehicles partly drove a third-quarter earnings beat.
The world's best-selling automaker said it now expects income for the year ending in March to come in at 4.9 trillion yen, up from previous projections of 4.5 trillion yen. Analysts had seen the forecast at 4.6 trillion yen, according to LSEG data cited by Reuters.
Hybrid car sales spiked 46% in the three months ended on Dec. 31. Demand growth for the Japanese firm's hybrids -- which include the popular Prius model -- was especially notable in the U.S., where more cost-conscious buyers are opting to avoid elevated electric vehicle prices.
Buoyed as well by a weaker yen, Toyota's operating profit of 1.68 trillion yen in the third quarter topped expectations.
However, Toyota cut its annual vehicle sales target following the suspension of shipments at its Daihatsu Motor unit due to an ongoing scandal around product certification test procedures.
4. Chinese stocks jump after market regulator offers support
The China Securities Regulatory Commission has said it will guide more local funds and asset managers to buy into the domestic market, while also instructing local firms to repurchase more shares.
Chinese equities, which were the worst performers in Asia throughout 2023 and have endured little relief so far this year, gained on Tuesday.
Recent media reports also said that China was tightening its regulatory grip on volatile movements in stock markets, and had instructed major fund managers to block customers from shorting local shares.
But it remains to be seen whether the measures can spur a sustained recovery in Chinese stocks. Concerns over slowing economic growth in the country have been a major catalyst of a rout in domestic equities, and have largely offset monetary stimulus measures from Beijing.
5. Oil prices choppy
Oil prices were volatile on Tuesday, as traders gauged geopolitical tensions and fading bets that the Federal Reserve will unveil early interest rate cuts.
Market participants are closely monitoring if U.S. Secretary of State Antony Blinken's trip to the Middle East can result in a truce in the war between Israel and Hamas. The U.S. has also been continuing its campaign against Yemen-based Houthis, who have carried out attacks on shipping vessels in response to the Israel-Hamas conflict.
Meanwhile, Reuters reported that analysts have flagged concerns that an extended period of restrictive Fed policy could weigh on activity in the U.S., the world's top crude consumer. Sluggish growth in top oil importer China have also negatively impacted sentiment, Reuters added.
Brent oil futures expiring in April had fallen 0.1% to $77.89 a barrel, while West Texas Intermediate crude futures dipped 0.2% to $72.68 per barrel by 05:14 ET.