US STOCKS-Wall St set to open lower on virus woes, U.S.-China tensions
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* JPMorgan tops estimates, Wells Fargo swings to net loss
* Delta warns air travel recovery two years away
* Futures down: Dow 0.10%, S&P 0.44%, Nasdaq 1.10% (Adds CPI data; Updates prices)
By Medha Singh and Devik Jain
July 14 (Reuters) - Wall Street was set for a lower open on Tuesday as investors digested a mixed bag of quarterly reports from U.S. lenders, with new business restrictions in California and simmering U.S.-China friction also denting risk appetite.
Largest U.S. lender JPMorgan Chase & Co rose about 1.2% in premarket trading as it posted a smaller-than-expected 51% drop in second-quarter profit and set aside $10.5 billion to cover potential bad loans.
However, Citigroup Inc fell 0.6% as it reported a plunge in quarterly profit and set aside billions for potential loan defaults, while Wells Fargo & Co shed 5.5% after it posted a quarterly net loss.
Wall Street has reclaimed most of its coronavirus-driven losses since March as a raft of monetary and fiscal stimulus and improving economic data raised hopes of a swift post-pandemic recovery.
But a recent record surge in COVID-19 cases and new business restrictions, particularly in California, have sparked a selloff in tech stocks, with the Nasdaq pulling back from record highs.
Data on Tuesday showed U.S. consumer prices rebounded in June after three straight monthly declines, but the underlying trend suggested inflation would remain muted and allow the Federal Reserve to keep injecting money into the ailing economy.
Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the 2008 financial crisis, according to Refinitiv IBES data.
"Expectations are so low that there's a good chance there will be a decent set of earnings reports over the next two or three weeks," said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.
Meanwhile, the United States on Monday rejected China's disputed claims to offshore resources in most of the South China Sea. The Trump administration also plans to scrap a 2013 auditing agreement that could foreshadow a broader crackdown on U.S.-listed Chinese firms.
At 9:11 a.m. ET, Dow e-minis were down 26 points, or 0.1%. S&P 500 e-minis were down 14 points, or 0.44% and Nasdaq 100 e-minis were down 116.25 points, or 1.1%.
Delta Air Lines Inc fell 4% as it warned it will be more than two years before the industry sees a sustainable recovery from the "staggering" impact of the coronavirus pandemic, with demand largely tracking the curve of infections in different places. (Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)
