Investors Brace for Major Earnings Reports As Stock Market Bounces Back
Stock indexes saw a significant bounce back on Tuesday, recovering some of the losses that have plagued the market through a brutal April. The S&P 500 rose 1.2%, the Dow Jones Industrial Average climbed 0.7%, and the Nasdaq saw a 1.7% increase. This surge in stock prices marked the largest single-day gain since February 22nd for the S&P 500, hinting at a potential turnaround for investors who have experienced a rocky month.
The rally was widespread, with 79% of S&P companies seeing their shares in the green by late afternoon on Tuesday. This momentum built off of a 0.9% gain seen on Monday, indicating that traders are regaining their risk appetite following a 5.5% decline in the S&P over the first three weeks of April. Notable gainers on Tuesday included General Motors, Danaher, and GE Aerospace, all of whom exceeded Wall Street expectations in their earnings reports.
Investors are now turning their attention to a major round of earnings reports set to be released after markets close on Tuesday. Electric vehicle giant Tesla and credit card giant Visa, both top players in the S&P, are among the companies expected to disclose their results. This week will also see earnings reports from other notable companies such as Meta, Microsoft, Alphabet, and ExxonMobil, which could further impact the market.
While the rally on Tuesday may have been broad, earnings growth still remains highly concentrated among a select group of big tech companies. According to FactSet, the 495 companies listed on the S&P, excluding the likes of Alphabet, Amazon, Microsoft, Meta, and Nvidia, are expected to report a decline in profits for the first quarter of 2024. Despite this, the overall index is projected to grow thanks to the significant bottom line growth expected from these key tech players.
Despite the recent rally, all three top indexes are still below their March peaks, reflecting the ongoing challenges in the market. The April stall has been driven by concerns that the Federal Reserve may maintain elevated interest rates due to inflationary pressures and geopolitical tensions in the Middle East. Investors will be closely watching earnings reports and market trends in the coming days to gauge the trajectory of the stock market and make informed investment decisions.
