Tech Stocks Rebound Ahead of Earnings: Markets Wrap

US stocks bounced back after experiencing their worst week since April, as investors shifted their focus to the upcoming tech earnings season and looked past political uncertainties.

Market Highlights:

• Rebound in Megacap Stocks: The Nasdaq 100 rose by 1%, with significant gains in the megacap space. The S&P 500 climbed to 5,545, while the Russell 2000, representing small caps, added 0.5%.
• Earnings Expectations: Despite recent market slumps, a Bloomberg survey indicated optimism among investors, with nearly two-thirds of respondents expecting corporate earnings from companies like Tesla Inc. and Alphabet Inc. to boost US equities.
• Political and Economic Focus: The market reaction to Joe Biden ending his reelection campaign and endorsing Kamala Harris was muted, with minor movements in the US dollar and Treasuries. Treasury 10-year yields increased by three basis points to 4.27%.
• Sector Movements: CrowdStrike Holdings Inc. faced continued challenges from a faulty software update, while Delta Air Lines Inc. struggled with the aftermath of a tech outage. In contrast, its competitors have largely recovered.

Corporate Highlights:

• Boeing Co. (BA): Dominated the Farnborough International Airshow, securing an estimated $12.6 billion in aircraft sales.
• Ryanair Holdings Plc (RYA.IR): Lowered its outlook for summer ticket prices, citing increased consumer caution.
• Verizon Communications Inc. (VZ): Reported lower-than-expected operating revenue due to fewer wireless equipment upgrades.
• McDonald’s Corp.(MCD): Extended its $5 meal deal across most US restaurants to attract budget-conscious diners.
• Berkshire Hathaway Inc.(BRK-B): Continued reducing its stake in BYD Co., now holding less than 5% compared to over 20% two years ago.

Investors remain vigilant as they anticipate key economic data and the Federal Reserve’s preferred inflation gauge, which could influence potential rate cuts in September.