Global Courant 2023-04-26 04:05:42
Traders on the floor of the NYSE
Source: NYSE
US stock futures rose Tuesday evening as Big Tech earnings began to roll out, led by Alphabet and Microsoft.
Futures tied to the Dow Jones Industrial Average gained 47 points or 0.1%. S&P 500 futures added 0.4%, and NASDAQ 100 futures gained 1.2%.
Microsoft beat Wall Street expectations on the top and bottom lines in the last quarter. The company also posted a major increase in revenue from its Intelligent Cloud business segment. Stocks gained 8%. Google parent Alphabet posted better-than-expected revenues, according to Refinitiv, and reported profits in its cloud business for the first time ever. Equities added more than 2%.
“We are still early in the season, but it seems that Wall Street has once again underestimated corporate America in general,” said Callie Cox, an analyst at investment firm eToro. “Company-level information could allay investor fears about how corporate America is coping with slowing growth and rising costs, especially given its focus on the labor market.”
During regular trading on Tuesday, the Dow fell about 344 points, or 1%. The S&P 500 ended 1.6% lower and the Nasdaq Composite fell nearly 2%.
First Republic Bank said late Monday that its first-quarter deposits fell 40% to $104.5 billion. This reignited concerns about the broader banking sector and weighed on key averages on Tuesday. Cox called the instance “an exception.”
“I felt encouraged by how well margins have held up,” she told CNBC. “That’s a function of both sales and expense management, but it shows us that investors may not have taken into account how much companies benefit from cooling labor and commodity costs.”
“There are a lot of eyes on how well technology is holding up as it has been driving the market lately,” she added. “Big Tech has undergone a lot of scrutiny and expectations for the industry are already quite low. We expect Big Tech companies to focus on profitability and cost-cutting measures in their earnings comments.”
Travel companies, including Boeing, Hilton Worldwide, Spirit Airlines and Travel + Leisure, will report their earnings results ahead of the bubble Wednesday. After the close, Meta Platforms, eBay and Mattel will report.
Elsewhere, investors are eyeing data on durable goods and mortgage purchases Wednesday morning before receiving Thursday’s latest GDP update and the large Personal Consumption Expenditures Price Index – the Fed’s favorite inflation gauge – on Friday.
