U.S. Stock Markets Stabilize Ahead of Quarterly Earnings Results
U.S. stock index futures and equities stabilized on Tuesday, consolidating after a rally in technology stocks hit all-time highs on Wall Street during the previous session, ahead of major company earnings data.
The major indexes posted solid gains on Monday, supported by strong performances in major technology shares, with market favorite Nvidia (NVDA) reaching an all-time high and coming close to surpassing iPhone maker Apple (AAPL) as the world’s most valuable company.
The S&P 500 rose 0.8% to a record high, the Dow Jones Industrial Average increased 0.5%, surpassing 43,000 points for the first time, while the NASDAQ Composite climbed 0.9%, nearing the all-time highs achieved earlier this year.
In addition to technology gains, stock markets were also buoyed by continued bets that the Federal Reserve will cut interest rates next month.
Q3 Earnings in the Spotlight
Investors’ attention is now focused on the third-quarter earnings season, which kicks off in earnest on Tuesday.
Financial giants Bank of America (BAC), Goldman Sachs (GS), Citigroup (C), and Charles Schwab (SCHW) are set to report their results on Tuesday, along with Johnson & Johnson (JNJ), United Airlines (UAL), UnitedHealth (UNH), and Walgreens Boots Alliance (WBA).
Morgan Stanley (MS) will round out the bank earnings on Wednesday, while Netflix (NFLX), Blackstone (BX), and American Express (AXP) are expected to release their results later in the week.
Investors will be closely watching to see if company earnings hold up despite the backdrop of pressure from high interest rates and persistent inflation.
This week, aside from earnings, attention will also turn to retail sales data, as well as speeches from several Federal Reserve officials, who may provide further insights on the economy and interest rates.
Oil Prices Fall on Demand Fears
Oil prices fell sharply on Tuesday, adding to recent losses amid concerns about slowing demand growth, particularly from top exporter China.
These fears were exacerbated by the Organization of the Petroleum Exporting Countries (OPEC) cutting its crude oil demand expectations for the third consecutive month.
Oil prices were also influenced by a reduced risk premium after Monday’s news that Israel will not attack Iran’s oil and nuclear facilities. Such an attack would have escalated the conflict and raised investor concerns about a potential supply disruption from the oil-rich region.