The technology-focused Nasdaq Composite index surged by 0.78% to a landmark closing value of 18,712.75 on Tuesday, ahead of significant corporate earnings announcements. Meanwhile, the broad S&P 500 climbed 0.16%, finishing at 5,832.92, while the Dow Jones Industrial Average lagged behind, dropping 154.52 points or 0.36% to settle at 42,233.05. Anticipation among investors is growing as major tech companies like Meta and Alphabet prepare to unveil their quarterly results on Wednesday and Thursday, respectively.
Meta’s shares soared by 2.6% and Alphabet’s by 1.8% on Tuesday. “This is an expensive market, and investors will need accelerated earnings growth to support these elevated PE ratios,” remarked CFRA Research Chief Investment Strategist Sam Stovall. This week is recognized as the busiest period of the earnings season, with over 150 S&P 500 corporations expected to disclose their results by the end of Friday.
Furthermore, market participants are closely monitoring Treasury yields, as the key 10-year Treasury yield reached its highest point since July. BTIG’s Chief Market Technician Jonathan Krinsky thinks there might be potential for short-term volatility in light of the upcoming U.S. presidential election, stating, “While we do not anticipate a bear market, we strongly believe that some downside volatility is likely in the coming weeks.”
The main averages are coming off recent peaks, with the Dow snapping a five-day losing streak, and the Nasdaq securing its eighth positive trading day out of the last nine. U.S. crude oil decreased slightly on Tuesday, continuing the downward trend after its worst performance in two years on Monday.
The U.S. benchmark contract dropped 17 cents or 0.25%, totaling $67.21 per barrel, while the global benchmark Brent fell by 30 cents or 0.42% to $71.12 per barrel. Energy traders expressed some relief this week after Israel’s retaliatory strikes on Iran did not impact the country’s oil and nuclear facilities. On Monday, U.S. crude oil plummeted over 6%, dropping $4.40 to close at $67.38 per barrel.
The North Face parent company reported adjusted earnings of 60 cents per share on revenues of $2.76 billion, exceeding analyst consensus forecasts. Company executives noted progress in the Vans brand, mentioning that sales, while still down 11% year-over-year, had improved from a 21% drop in the previous quarter. The shares have now increased over 10% in 2024, indicating it could be the stock’s first positive year since 2019.
Despite the Nasdaq and S&P 500 trading close to record highs, market breadth showed weakness. Nearly 68% of all stocks on the New York Stock Exchange experienced price declines, with around 1,904 out of 2,820 stocks falling. More than 51% of stocks on the Nasdaq were also down.
Meanwhile, shares of Crocs plummeted over 18% in afternoon trading, despite the company reporting quarterly results that exceeded expectations. This stock is heading towards its most significant decline since March 2020. For Q3, Crocs reported earnings of $3.60 per share with $1.06 billion in revenue, outperforming consensus estimates.
However, the disappointing forecast for the fourth quarter led to the stock’s decline. On the wider market’s activity from Tuesday, both the S&P 500 and Nasdaq finished in positive territory while the Dow experienced a slight drop. Investors and traders continue to navigate a diverse landscape of earnings reports, economic indicators, and geopolitical events shaping the market.
