Tech Stocks Rally into Earnings – Nasdaq up 0.78%
US markets saw another mixed trading day yesterday as tech stocks rallied higher ahead of key earnings updates from the so-called ‘Magnificent 7’ firms. After the bell, Alphabet reported higher quarterly sales, sending Google’s parent company up more than 5%. Earlier, the Dow slipped by 0.36%, while the tech-heavy S&P and Nasdaq indices edged higher, gaining 0.17% and 0.78% respectively. US Treasury yields ultimately closed slightly lower on the day, despite reaching four-month highs earlier. The 2-year yield dropped 2.3 basis points to 4.117%, while the 10-year yield eased 0.6 basis points to 4.272%. Oil prices dipped further as hopes for a ceasefire in the Middle East grew, with Brent down 0.4% at $71.12 and WTI down 0.3% at $67.21. Meanwhile, gold surged to another all-time high, hitting $2,774.75 before settling slightly lower at $2,769.25.
Stocks Set for More Volatility Ahead
This week marks the busiest period for S&P earnings this quarter, with tech stocks once again taking centre stage just one week before the US elections. Despite some concern over potential market volatility in the wake of the election, the Nasdaq closed at a record high yesterday, and Alphabet’s positive sales figures indicate potential for further gains when Wall Street opens tomorrow. Traders are cautiously optimistic but wary of some recent discrepancies—such as rising yields, elevated stock prices, and gold reaching all-time highs—that could signal sharp corrections in the coming weeks. Besides the US election, the upcoming Federal Reserve meeting could also heavily influence market sentiment, possibly setting the stage for one of the most volatile trading periods in recent memory.
Event Calendar Intensifies for Traders Today
Today brings a ramped-up macroeconomic event calendar for traders, with top-tier data releases and central bank announcements across the trading day. The early focus will be on Australian markets, with the latest CPI data expected during the Sydney morning, forecasting a 0.3% quarterly increase and a year-on-year rate decline to 2.3%. Europe also has key inflation data releases, with Germany’s monthly CPI figures scheduled by state and Spain’s Flash CPI update due early in the day. The US session promises even more tier-one data, with GDP and ADP Non-Farm Employment numbers scheduled simultaneously. Facebook and Microsoft are set to release their earnings updates, while central bank chiefs Tiff Macklem and Martin Schlegel are also expected to speak.
