Nasdaq stock futures traded lower on Tuesday night following the second-quarter earnings reports of megacap tech companies Alphabet and Tesla. Futures tied to the tech-heavy Nasdaq 100 declined by 0.5%, while S&P 500 futures fell 0.4% and Dow Jones Industrial Average futures slipped 0.2%. Google parent company Alphabet saw its shares drop 1.7% in after-hours trading despite reporting a beat on both top and bottom lines, as Youtube advertising revenue fell short. Tesla’s shares also declined by over 6% due to weaker-than-expected results and a 7% drop in auto revenue year-over-year.
At the start of the week, approximately 20% of the S&P 500 companies had reported their second-quarter earnings, with 80% of them surpassing expectations based on data from FactSet. During the main trading session on Tuesday, the broad market index pulled back around 0.2%, while the Nasdaq Composite and the Dow both edged down around 0.1%. Investors have been anticipating a potential interest rate cut by the Federal Reserve at its September meeting, and with confidence in a soft landing increasing, the market has continued to rally in recent weeks. Sectors such as small caps and industrials have experienced gains in response.
Solus Alternative Asset Management’s chief strategist and economist Dan Greenhaus commented on the market rally by emphasizing the continued growth of the economy and the ability of corporations to navigate the current environment successfully. He suggested that the market’s elevated valuations are reflective of these factors, contributing to ongoing investor confidence. Greenhaus expressed a lack of concern for potential changes in the market in the near future, stating that there is no reason for increased worry compared to previous months.
Looking ahead, investors will turn their attention to the quarterly earnings reports of companies such as AT&T, General Dynamics, and Boston Scientific on Wednesday morning. These results will be closely watched for any further insights into the financial performance of major corporations during the second quarter. With earnings season in full swing, market participants will continue to monitor the releases of key companies to assess the overall health of the economy and make informed investment decisions based on the data provided. As market conditions remain uncertain, staying informed about earnings reports and economic indicators will be crucial for navigating the current investment landscape.
