Stock futures are flat ahead of major earnings reports on Tuesday

U.S. stock futures were steady in overnight trading Monday as investors geared up for a big day of earnings on Tuesday.

Dow futures fell just 12 points. S&P 500 futures fell 0.03% and Nasdaq 100 futures were around the flat line.

On Monday, the S&P 500 and Nasdaq Composite notched their fourth day of gains. The S&P 500 rose 0.34%. The Nasdaq was the relative outperformer, gaining 0.84% as Facebook, Amazon, Apple, Netflix and Google-parent Alphabet all closed higher.

The Dow Jones Industrial Average lost 36 points, dragged down by a 3% drop in Disney’s stock.

Earnings season continues on Tuesday with major reports from Johnson & Johnson, Procter & Gamble, Netflix and United Airlines.

Of the 41 S&P 500 companies that have reported third-quarter results, 80% beat earnings expectations, according to FactSet. While reports have been strong, investors are looking for commentary from corporate America about supply chain issues and inflation.

“The financials got earnings season off to another strong start, but let’s be honest, COVID and supply chain issues aren’t going to impact this group. Now it gets very interesting to see what other industries will have to say about the health of the economic recovery,” said Ryan Detrick, chief market strategist at LPL Financial.

Netflix could set the tone for technology earnings this season. Three months ago, the streaming giant forecasted paid net subscriber adds of 3.5 million, while analysts expect about 3.84 million, according to StreetAccount. Analysts are also forecasting fourth-quarter subscriber guidance of 8.5 million, which would be the highest outlook since the first quarter of 2019.

Netflix’s stock has traded lower on six of its last seven earnings releases.

Earnings from United Airlines should give investors a gauge on the travel recovery from the pandemic and Procter & Gamble earnings could show how strong the consumer is in the goods sector.

Stocks are coming off of a winning week but have been volatile since September. Morgan Stanley’s chief U.S. equity strategist Mike Wilson — who has been calling for a correction in the broader market — told clients on Monday that although fundamentals are deteriorating, the market seems to be resilient to a bigger pullback.

“Whether we end up getting this finishing move at the index level this year or not will depend largely on retail participation, the message that 3Q earnings brings from a guidance standpoint, and the path of PMIs into year end,” said Wilson.

Economic data from China weighed on investor sentiment after it reported low GDP and industrial production for September that fell short of expectations. Industrial production in the U.S. also fell for September as supply constraints continued to hinder manufacturing, the Federal Reserve reported Monday.

— with reporting from CNBC’s Robert Hum.