Stock Market Rebounds After $2 Trillion Selloff, Big Tech Earnings in Focus
After a tumultuous period that saw a $2 trillion selloff in the stock market, investors are now turning their attention to big tech companies and their earnings reports. This week is shaping up to be one of the busiest in terms of earnings announcements, with about 180 S&P 500 companies set to report their results.
The focus, however, is on the so-called “Magnificent Seven” megacaps, including tech giants like Microsoft, Alphabet, Meta Platforms, and Tesla. These companies are expected to see their profits rise by nearly 40% from a year ago, according to Bloomberg Intelligence.
Investors are eagerly awaiting these earnings reports, as they will provide insight into whether big tech can meet the lofty expectations for artificial intelligence. The performance of these companies will be crucial in determining the direction of the stock market in the coming weeks.
While some analysts are optimistic about the earnings season, others are more cautious. Equity strategists at top banks are split on whether companies can deliver on robust earnings forecasts, with concerns about inflation, a stronger dollar, and geopolitical tensions clouding the outlook.
Despite these uncertainties, the stock market has rebounded, with the S&P 500 reclaiming its 5,000 mark and heading towards its biggest gain in two months. Tech stocks, in particular, have seen a resurgence, with Nvidia Corp. leading the gains.
Hedge funds are also back to buying global equities, particularly tech stocks, at the fastest pace in two months. This bullish sentiment is reflected in a recent survey where nearly two-thirds of respondents expect earnings to boost the US equity benchmark.
Overall, this week’s earnings reports will be crucial in determining the near-term trajectory of the market. While there are concerns about rising interest rates and geopolitical risks, the performance of big tech companies could be a deciding factor in whether the stock market continues its advance.
