Tech Titans Shine: In overnight trading, Dow Jones futures rose, while S&P 500 and Nasdaq futures showed slight declines. Major tech players, Microsoft and Google parent Alphabet, made headlines with their earnings reports. The stock market rally showed some positive signs on Tuesday as the S&P 500 reclaimed its 200-day line, bolstered by steady Treasury yields and generally favorable earnings reactions.
However, investors are cautioned to remain vigilant, as this rally is in its early stages and hasn’t proven its sustainability.
Microsoft’s stock received a boost from its earnings report, although gains were trimmed due to guidance concerns. On the other hand, Google’s stock saw a decline.
The significance of Microsoft’s earnings and guidance, along with Google’s performance, can’t be overstated, particularly for the tech sector, including artificial intelligence and cloud computing. In the coming days, Meta Platforms and Amazon.com will release their earnings reports, with Meta’s stock experiencing a dip and Amazon’s showing a rise in after-hours trading.
Visa reported its earnings on Tuesday night, which had a modest impact on its stock.
Looking ahead, Dow Jones giant Boeing, along with Vertiv and CME Group, are set to announce their earnings on Wednesday morning.
Meta stock is featured on IBD Leaderboard, while Microsoft stock is included in IBD Long-Term Leaders. Meta is also part of the IBD 50 list.
Also Read: EU Digital Services Act: How Tech Titans Navigate New Digital Terrain
Dow Jones Futures Today, Dow Jones futures rose 0.25% compared to fair value, with support from MSFT stock, while Visa had a marginal negative effect. S&P 500 futures dipped 0.1%, and Nasdaq 100 futures saw a 0.2% decline, with Microsoft and Google stocks somewhat offsetting each other. Meanwhile, Meta and Amazon stocks showed slight decreases.
The 10-year Treasury yield experienced a slight drop to 4.82%. It’s important to remember that overnight moves in Dow futures and other indices don’t always translate directly to the regular stock market session.
The ongoing stock market rally attempt made some notable gains on Tuesday. Major indices rebounded for the second consecutive session, closing in the upper third of their daily ranges, in contrast to Monday when they ended lower.
Earnings reactions were generally positive on Tuesday, marking a shift from mostly negative reactions in the previous week. Many of the earnings gains were observed in previously struggling stocks, including Dow components Verizon, 3M, and Coca-Cola.
The Dow Jones Industrial Average saw a 0.6% rise in Tuesday’s stock market trading, with the S&P 500 index gaining 0.7% and crossing the 200-day line. The Nasdaq composite advanced 0.9%. While the Nasdaq embarked on its second day of a stock market rally attempt, the Dow Jones and S&P 500 started their rally on the first day. It’s essential to note that a few modest upswings do not indicate a market reversal. However, if the rally attempt gathers momentum, it may lead to a follow-through day later this week, confirming a new uptrend.
Market breadth showed some positivity, but it had been consistently weak for several weeks or even months. New lows continue to outnumber new highs. The small-cap Russell 2000 posted an 0.8% gain, bouncing back from a 52-week low reached on Monday.
The First Trust Nasdaq 100 Equal Weighted Index ETF increased by 0.96% compared to 0.97% for the Nasdaq 100. The Nasdaq 100 remained below its 200-day line, with Meta, Microsoft, and Google staying above their 50-day lines.
The 10-year Treasury yield remained essentially unchanged at 4.84%, after a drop from 5% on the previous day. U.S. crude oil prices experienced a 2.1% decline, reaching $83.74 per barrel.
In the realm of growth ETFs, the Innovator IBD 50 ETF surged by 1.9% in Tuesday’s stock market trading. The iShares Expanded Tech-Software Sector ETF was up by 0.91%, with Microsoft stock being a significant holding. The VanEck Vectors Semiconductor ETF climbed 1.2%.
Reflecting more speculative story stocks, ARK Innovation ETF rose by almost 3%, and ARK Genomics ETF advanced by 2.9%.
SPDR S&P Metals & Mining ETF showed a 1.5% rise, while the Global X U.S. Infrastructure Development ETF increased by 0.5%. U.S. Global Jets ETF fell by 0.33%. SPDR S&P Homebuilders ETF saw a 0.2% dip. The Energy Select SPDR ETF experienced a 1.4% decrease, and the Health Care Select Sector SPDR Fund eked out a 0.3% gain.
In the same period, the Industrial Select Sector SPDR Fund climbed by 0.75%. The Financial Select SPDR ETF recorded a 0.7%
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