The market experienced a rollercoaster of a week, with stocks bouncing back on Monday and seeing modest losses on Tuesday. However, the tech selloff that haunted the previous week swiftly resumed following disappointing earnings from Alphabet (GOOGL) and Tesla (TSLA). Wednesday witnessed the S&P 500 Index (SPX) and Nasdaq Composite Index (IXIC) suffer their worst single-session losses since September 2022, with the Dow Jones Industrial Average (DJIA) also plummeting over 500 points.
Despite the setbacks, optimism surrounding a potential September interest-rate cut buoyed sentiment, especially after inflation numbers aligned with expectations. At present, the Dow is making strides to recover into positive territory for the week, soaring over 600 points on Friday. Simultaneously, the blue-chip index is poised for its fourth consecutive weekly gain, while the S&P 500 and Nasdaq face potential weekly losses.
Earnings Season Impact
The earnings season remains in full swing, unravelling a plethora of corporate performances beyond Alphabet and Tesla. Notably, Coca-Cola (KO) shares surged to two-year highs post a beat-and-raise announcement, and 3M (MMM) witnessed a surge after a positive earnings report. Conversely, Ford Motor’s (F) disappointing report shook the market, leading to a significant decline in the company’s stock.
Amidst the earnings whirlwind, Verizon (VZ), Ryanair (RYAAY), United Parcel Service (UPS), and Honeywell (HON) observed downward slides in the aftermath of their earnings releases. However, Lockheed Martin (LMT), AT&T (T), Coursera (COUR), and Boston Beer (SAM) all recorded gains.
Stocks of Interest
Homebuilding stocks have been ablaze this month as investors pivot from growth stocks to cyclicals in anticipation of an interest rate cut. Noteworthy players in this sector include D.R. Horton (DHI), PulteGroup (PHM), and Lennar (LEN), all of which hit record highs recently. Additionally, Tesla and two other popular electric vehicle (EV) stocks were under the spotlight post their earnings-related activities.
Anticipation for Interest Rate Decision
The upcoming interest rate decision by the Federal Open Market Committee (FOMC) has the market on edge. While investors are eyeing September for potential rate adjustments, some are already hopeful for a cut. Insight from Federal Reserve Chairman Jerome Powell is eagerly awaited for clues on the Fed’s roadmap. As the week progresses, a wave of economic data and earnings reports from market giants like Microsoft (MSFT), McDonald’s (MCD), and Procter & Gamble (PG) are expected, alongside analysis on S&P 500 trends and recent options activity.
