Nasdaq stock futures were lower on Tuesday night after Alphabet and Tesla reported their second-quarter results. Futures tied to the Nasdaq 100 fell by 0.5%, while S&P 500 futures dropped 0.4% and Dow Jones Industrial Average futures slipped 0.2%. Alphabet’s parent company, Google, saw its shares fall by 1.7% in extended trading, despite reporting a top and bottom line beat. However, Youtube advertising revenue fell below expectations. Tesla shares also declined by more than 6% due to weaker-than-expected results and a 7% year-over-year drop in auto revenue.
Around 20% of S&P 500 companies had reported their second-quarter earnings at the start of the week, with 80% of them surpassing expectations, according to FactSet data. During Tuesday’s main trading session, the broad market index retreated by 0.2%, while the Nasdaq Composite and Dow each edged down by 0.1%. Investor confidence in a soft landing and the likelihood of the Federal Reserve cutting interest rates at its September meeting have contributed to the market rally. Sectors such as small caps and industrials have been rising in recent weeks as a result.
Solus Alternative Asset Management chief strategist and economist Dan Greenhaus commented on the market environment, noting that the economy continues to grow, corporations are managing well, and the market is reflecting these positive trends in its valuations. Greenhaus expressed confidence in the market rally, stating, “As long as something doesn’t change on that front, I don’t know why I would be any more scared tomorrow or the next day than I’ve been over the previous eight, three months.”
Looking ahead, investors will be focusing on the quarterly results of AT&T, General Dynamics, and Boston Scientific on Wednesday morning. As earnings season continues, market participants will be monitoring the performance of these companies closely to gauge the overall health of the economy and corporate sector. The outcomes of these reports could have an impact on market sentiment and future trading activity. It remains key for investors to stay informed and react accordingly to developments in the earnings landscape.
Overall, despite the lower futures trading and declines in shares of Alphabet and Tesla, the broader market has shown resilience in the face of challenges. The majority of S&P 500 companies have exceeded earnings expectations, contributing to investor optimism. The potential for interest rate cuts and positive economic indicators have fueled the market rally, with sectors such as small caps and industrials benefiting from the positive sentiment. Market participants are closely monitoring earnings reports to gain insights into corporate performance and overall economic health, which could influence future market movements.
