Stock futures slip after first trading day in August

U.K. oil giant BP boosted its dividend on Tuesday as it posted bumper second-quarter profits, benefitting from a surge in commodity prices.

Second-quarter underlying replacement cost profit, used as a proxy for net profit, came in at $8.5 billion. The soaring profits gave BP room for a 10% increase in its quarterly dividend payout to shareholders, raising it to 6.006 cents per ordinary share.

European markets pulled back slightly on Tuesday, tracking risk-off sentiment globally as investors assess whether last month’s rally has further to run.

The pan-European Stoxx 600 dropped 0.7% in early trade, with basic resources shedding 1.8% to lead losses as almost all sectors and major bourses slid into the red.

Earnings remain a key driver of individual share price movement. BP, Ferrari, Maersk and Uniper were among the major European companies reporting before the bell on Tuesday.

Stock futures opened flat in overnight trading on Monday.

Futures tied to the Dow Jones Industrial Average inched 0.06% lower, or 21 points. S&P 500 futures and Nasdaq 100 futures dipped 0.06% and 0.01%, respectively.

— Samantha Subin

Investors overallocated toward stocks should consider using the current market conditions to trim back their positions as the upside for equities is limited going forward, says Keith Lerner, co-chief investment officer at Truist.

According to Lerner, the upside for the market over the next few months is likely capped in the 3% to 5% range, but the downside could exceed that amount.

“The market’s been very resilient, no doubt, and maybe it stays that way for a little bit, but we don’t see the risk-reward as that compelling here,” he said.

This by no means is an indication of the top of the market and equities could squeeze higher, but it is an opportunity to reallocate exposure after last month’s strong market rally, Lerner added.

–Samantha Subin

Pinterest shares popped more than 21% after the company posted stronger-than-expected user numbers and Elliott Management revealed it’s the largest shareholder in the image-sharing company.

Activist investor Elliott said in a statement that it has “conviction in the value-creation opportunity” at Pinterest, calling the social media company a “highly strategic business with significant potential for growth.”

 “As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest’s next phase of growth,” Elliott wrote.

Despite the stock move, Pinterest missed estimates for…