Nasdaq futures pointed to a jump in tech stocks after Google parent Alphabet reported a surge in profit, sending its shares more than 10% higher in premarket trading.
Futures tied to the S&P 500 added 0.8%, indicating the broad-market index could extend its rally into a fourth day. It is up 2.6% so far this week. Nasdaq-100 futures rose 1.5%, suggesting gains for tech stocks after the opening bell. Dow Jones Industrial Average futures edged up 0.1%.
Stocks have staged a recovery in recent days after the worst month since the pandemic began. Signals from Federal Reserve officials of plans to tighten monetary policy faster than previously expected to fight inflation weighed on sentiment and prompted a selloff in growth stocks. This week, major indexes recouped some losses.
“The focus has clearly turned to earnings, we’ve seen strong results from big tech companies. But at some point, we might have sentiment turning back to macro data and the Fed—we think we will oscillate between these two points,” said Luc Filip, head of investments at SYZ Private Banking. “For financial markets, this means more volatility.”
With earnings season about halfway through, the number of companies that have beaten Wall Street’s expectations on sales and profit is above average, although lower than earlier in the recovery, according to analysis from
Shares of Alphabet, Google’s parent company, surged over 10% in off-hours trading after profit rose by a third in the last quarter. The search giant also announced a 20-for-1 stock split. Chip maker
rose over 11% after it reported revenue and a sales outlook above analysts’ forecasts, also sending shares of
a semiconductor firm it is planning to acquire, up close to 11%.
“This has helped turn things around. It reminds people that earnings growth isn’t just about the future and tomorrow’s gravy. Some of these companies are delivering today,” said John Roe, head of multiasset funds at Legal & General Investment Management. Investors are buying the dip after the Nasdaq entered correction territory last month, he added.
tumbled 16% after the company posted lower earnings and higher expenses. Square parent Block followed, declining 7%.
fell nearly 3% after it said rising costs will continue to weigh on its profits in the months ahead.
formerly known as Facebook, Spotify,
are scheduled to report earnings Wednesday after markets close.
The yield on the benchmark 10-year Treasury note ticked down to 1.791% from 1.799% on Tuesday.
Oil prices were stable ahead of Wednesday’s OPEC meeting, where major producers are expected to discuss an output increase. Some in the group are already struggling to deliver their quotas, which will likely support prices, analysts said. Global benchmark Brent crude edged down 0.3% to trade at $88.93 a barrel.
A data release from ADP on private-sector employment in January is expected at 8:15 a.m. ET. Investors are awaiting more information on the state of the labor market, after a report on Tuesday showed that job openings rose and the quit rate remained high in December.
Overseas, the pan-continental Stoxx Europe 600 climbed 0.6%.
fell 6.5% after the Swiss bank reported higher operating expenses and provisions.
In Asia, Chinese markets were closed for the Lunar New Year holiday. Japan’s Nikkei 225 climbed 1.7%, buoyed by strong earnings reports from financial firm Nomura and electronics company Keyence.
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