The Nasdaq breaking record shows that investors believe in tech's earning delivery capabilities. Alphabet and Meta Platforms are scheduled to report quarterly earnings, with stocks rising in front of those reports, as Meta shares rise by 2.6%, while Alphabet climbs 1.7% in pre-earnings trading. Analysts say this week's earnings among the tech majors will give the cue for the wider market, with over 150 companies on the S&P 500 reporting earnings.
Key Takeaways
Nasdaq new high record: Tech-led gain sends Nasdaq to new high ahead of big earnings.
Big Tech earnings: Results from Alphabet, Meta, Microsoft set to drive market sentiment.
Global markets-A glance at global market dynamics: Treasury yields, mixed international market performances set tech apart in strength.
Market Sentiment and Earnings Anticipation
Investor sentiment has remained optimistic, with the CNN Fear & Greed Index remaining in the "Greed" zone, indicating strong market momentum. This mood is driven by expectations that earnings season will confirm resilience in the tech sector, despite broader economic pressures. Though mixed, further gains in both the S&P 500 and Dow Jones imply that investors are homing in on how this performance from tech companies may trickle into the overall trajectory of the market.
Performances by Sector, and Nasdaq's Growth by Technology
As of Tuesday, only two sectors outperformed in the S&P 500: Communication Services and Technology. The former was up 1.56% while the latter performed on the downside, Utilities losing 2.13%. Such domination by technology and communication services speaks much about why Nasdaq is reaching historical highs during this reporting season.
Nasdaq High and Companies Expected to Force Market
A slew of heavyweights is likely to move markets as record levels for the Nasdaq put more focus on technology earnings. Alphabet, Meta Platforms, and Microsoft top the list of companies likely to post substantial earnings growth and give a glimpse at what sustains fascination with technology by investors.
Alphabet, Meta Platforms Lead Anticipation
Alphabet's stock was up 1.7% in premarket trading before the company's earnings, due along with Snap and Reddit. Meta Platforms, set to report on Wednesday, rose 2.6%. As two of the largest components in the Nasdaq, their earnings results are expected to impact overall market sentiment. Strong results would solidify the trends that have driven the Nasdaq to its new highs.
Investors Await Microsoft and Apple Earnings
Of course, Microsoft and Apple are one of the most-watched companies this week. Microsoft will report earnings on Wednesday, while Apple will do so on Thursday. Both are critical in light of their huge portions of market capitalization in the Nasdaq. Earnings focus will be on Microsoft's cloud revenue and Apple's product updates, which should capture market attention. According to analysts, these earnings could probably further support the Nasdaq moving upward at record levels.
Broader market movements and economic factors
Beyond earnings, the Nasdaq has been helped in breaking record levels by various dynamics in the market. Investors have been keenly watching Treasury yields, as the 10-year Treasury yield rose to its highest level since July. Normally, higher yields tend to indicate investor confidence in economic growth, though such yields may place pressure on growth stocks, especially in tech. Nonetheless, tech has continued to rally, as earnings anticipation offsets any negative impact caused by the rising yields.
Nasdaq outperformed S&P 500 and Dow Jones
While the Nasdaq surged to a new high, the S&P 500 increased 0.16% and ended at 5,832.92, and the Dow Jones Industrial Average lost 0.36% and wrapped up the session at 42,233.05. By contrast, that would show singular strength in the technology sector, as this is the first record-breaking level of the Nasdaq, which says something about how the market has responded differentially to technology earnings against a mixed set of expectations in other sectors.
Global Market Context and Commodity Performance
In international markets, Asian stocks were mixed, as Japan's Nikkei ticked 0.77% higher while China's Shanghai Composite lost 1.08%. European equities fell into the red, led by growth and earnings concerns in the region. Back in the States, commodities ended higher, with gold, silver, and oil posting positive moves to add a safe-haven bid to market action. Investors eye potential economic pivots both stateside and abroad.
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