Futures tied to the Dow Jones Industrial Average fell by 110 points, or 0.2%, as investors reacted to recent earnings reports from major companies. It would come on the heels of a bullish day for the Dow, which added 1.14%, or 507.85 points, in its last session of trade. The index is just four points short of setting a new all-time record close. That leaves the possibility for even greater victories in the coming months!
Alphabet beat analyst estimates for its second quarter earnings and revenue. Consequently, its stock price jumped 2%. This strong report from Alphabet has added to the waves of market optimism seen in markets, especially the tech-heavy NASDAQ. Tesla’s earnings report, released after Wednesday’s bell, disappointed investors as the company experienced a drop in auto revenue for the second consecutive quarter. In reaction to the announcement, shares of Tesla dropped as much as 3% during a volatile trading session.
The broader market showed mixed signals. The Nasdaq Composite increased by 0.61%, closing well above the key 21,000 mark for the first time. Futures for the Nasdaq 100 were 0.4% up, showing a confirmation of positive sentiment from the tech sector. At the same time, the S&P 500 gained 0.78%, earning its 12th record close of the year.
Beyond earnings calls, new narratives are developing in the market related to trade deals being discussed. Now, a new trade deal with Japan has been trumpeted. It would replace Japan’s current 15% “reciprocal” tariff on goods imported from Japan to the U.S. Ongoing negotiations with the European Union are centered around a proposed 15% levy on goods entering the U.S. from the bloc. Analysts see these trends as signs that the nation is on the right track toward long-term economic prosperity.
Jeremy Siegel, a noted financial analyst, commented on the current market environment, stating:
“We’re beginning to see some clarity here with these deals being made, and that’s certainly bullish. And certainly that keeps the momentum going in the stock market.” – Jeremy Siegel
Moving forward, stock investors will be looking mighty close to all future economic data releases. Weekly jobless claims data and the July purchasing managers’ index data are anticipated shortly, alongside June’s new home sales figures. These additional reports may shed more light on the health of the economy and accordingly dictate market swings based on that data.