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Traders, here on the New York Stock Exchange, were encouraged by the earnings posted Tuesday. (NYSE)
U.S. stock futures were up Tuesday evening as investors processed a rush of second-quarter earnings results that sent
Alphabet
,
Chipotle
,
Microsoft
,
and
Texas Instruments
shares up in after-hours trading.
The major indexes slid during the session, with the S&P 500, Dow Jones Industrial Average, and tech-filled Nasdaq Composite losing 1.2%, 0.7%, and 1.9%, respectively.
Walmart
(ticker:
WMT
), which cut its profit guidance by about 10% for the full year on Tuesday afternoon, fell 7.6%, bringing other retailers like
RL
),
DLTR
), and
Best Buy
(
BBY
) down with it.
But Tuesday afternoon’s corporate earnings blitz largely put investors in a better mood. More than 150 public companies reported results on Tuesday, according to
Nasdaq’s
Earnings Calendar, setting up an even busier 48 hours ahead on Wednesday and Thursday.
Though
Visa
(
V
) was slightly down in after-hours trading, strong results from
Alphabet
(
GOOGL
),
TXN
), and
CMG
) buoyed investors’ optimism. Chipotle led all S&P 500 stocks in late trading, rising 8.2% after its earnings of $9.30 per share surpassed estimates for an EPS of $9.03.
Microsoft
’s
(
MS
FT) earnings missed estimates but shares gained 5.7% as the company forecast double-digit revenue growth for its fiscal year.
At 6:30 p.m. Eastern time, futures for the S&P 500, Dow Jones Industrial Average, and Nasdaq were up 0.7%, 0.3%, and 1.4%, respectively.
Alphabet
’s
earnings missed estimates, but better-than-feared ad revenue—its Google advertising revenue grew about 12% to over $56 billion in the most recent quarter—seemed to assuage the digital advertising concerns that caused
Snap
(
SNAP
) stock to plummet late last week.
Alphabet was up 5.5% after the close, as
Meta
(
META
) and
Amazon
(
AMZN
) each rose about 2.6%. The Facebook parent reports earnings on Wednesday, while
Apple
(
AAPL
) and
Amazon
follow Thursday afternoon.
Texas Instruments
(TXN), the first major chip company to release results for the second quarter, rose 2.6% after its earnings per share of $2.45 surpassed the consensus estimate for $2.13, according to FactSet.
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- Stocks Fall After Walmart Warning on Inflation
Along with the heap of corporate earnings that arrived Tuesday afternoon, investors were also positioning their portfolios for news from the Federal Reserve, which is trying to cool demand to stifle inflation while steering the economy to a “soft landing.” The Federal Open Market Committee concludes its two-day July meeting on Wednesday, and the central bank has scheduled a press conference to discuss its rate-hike decision at 2 p.m. Eastern time.
A 0.75-point increase in the target interest rate is expected with about 75% probability, according to a Tuesday evening reading of the CME FedWatch tool, while there is a 25% chance that the FOMC decides to increase the rate by a full percentage point, or 100 basis points. The federal-funds rate currently sits at a range of 1.5% to 1.75%.
“Anything other than a 75bp hike would be a huge surprise, but we expect Chair Powell’s press conference to be a repeat, more or less, of the June event, and the testimony he delivered to Congress on June 22 and 23,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote Tuesday, referring to Fed. Chair Jerome Powell. “Mr. Powell will repeat that the Fed regards inflation as a scourge, especially on low-income households, and that policy makers are determined to bring it down.”
In a Monday note,
Morgan Stanley
’s
(MS) team of economists shared that they think June should mark the worst month for headline, year-over-year inflation readings since gas prices have started to fall, but they still believe high inflation will commit the central bank to “an aggressive hiking path this year.”
“We continue to expect the Fed to deliver an additional 75bp hike at its July meeting and 50bp in September and November,” the economists wrote. “A final 25bp hike in December 2022 brings the federal-funds rate to a peak of 3.625% as labor market slowing becomes apparent and a downward trajectory in inflation becomes more clearly entrenched.”
T-Mobile
(
TMUS
),
BMY
), and
Boeing
(
BA
) are among the companies reporting earnings before the opening bell on Wednesday.
Write to [email protected]
Source: https://www.barrons.com/articles/stock-futures-rise-51658876390?siteid=yhoof2&yptr=yahoo