Traders on the floor of the New York Stock Exchange were buzzing with excitement on Aug. 4, 2022, as S&P 500 futures rose in overnight trading following strong earnings reports from tech giants Alphabet and Microsoft.
Futures linked to the broad market index climbed 0.7%, with Nasdaq 100 futures jumping 1% and Dow Jones Industrial Average futures gaining 0.08%. Shares of Alphabet surged 11% in extended trading after reporting better-than-expected first-quarter earnings and authorizing its first ever dividend along with a $70 billion buyback. Microsoft also saw a 4% increase in shares following impressive fiscal third-quarter results.
The positive performance of these megacap stocks is expected to give the major averages a boost after a down day on Wall Street, where the Dow fell 375 points and the S&P 500 and Nasdaq Composite dropped 0.5% and 0.6%, respectively. The market sell-off was triggered by new U.S. economic data showing a slowdown in growth and persistent inflation.
Despite the recent volatility, major averages are on track for a winning week, with the S&P 500 up 1.6%, the Nasdaq gaining over 2%, and the Dow rising 0.3%. Nearly 80% of S&P 500 companies have beaten earnings expectations so far this quarter, with investors eagerly awaiting reports from energy giants Chevron and Exxon Mobil.
Friday will also bring the release of March’s PCE reading, a key inflation gauge closely watched by the Federal Reserve. Analysts believe the Fed may slow the pace of balance sheet runoffs in response to higher-than-expected inflation, but may wait until September to reduce interest rates.
Overall, the market remains optimistic as strong earnings reports continue to drive investor confidence and support a positive outlook for the week ahead.
