- US equities reverse week-start losses amid market’s positive outlook for Q2.
- Q2 earnings growth expectations for S&P 500 jumped 72% YoY.
- IBM marks upbeat results, Netflix posts mild losses on mixed reports.
- US policymakers tease bulls ahead of Wednesday’s voting on an infrastructure bill.
The key US stock indices rallied over 1.5% each on Tuesday, almost reversing the previous day’s losses, as markets expect a strong earnings season and the policymakers have reasons to announce another stimulus and keep monetary policy easy. Even so, bulls remained cautious as Delta covid variant updates aren’t improving much.
That said, Dow Jones Industrial Average (DJI) rallied 550 points or 1.62% to close around 34,512 whereas Nasdaq jumped 223 points and added 1.57% to 14,498. Further, S&P 500 rose 64.702 points, or 1.52%, to close around 4,323.
Refinitiv data suggests over 70% expectations for Q2 earnings growth estimate for the entire S&P 500 lot while IBM posted stronger-than-expected results late Monday and benefited on Tuesday, up around 1.5%. On the other hand, Netflix posted mild losses after a volatile session as earnings missed market forecasts but net paid subscribers jumped to 1.54 million.
Elsewhere, US Senate Majority Leader Chuck Schumer announced a procedural vote on the infrastructure spending bill but also signaled that not all the details will be passed. Even so, Minority Leader McConnell said on Tuesday, per Reuters, that efforts to pass a bipartisan infrastructure bill in the Senate would not be slowed down if Democrats lost a procedural vote to begin debate on Wednesday. Recently, Democratic Senator Joe Manchin hinted that sides “Not that far apart” in infrastructure talks.
It’s worth noting that the Delta covid variant woes remain present and joins recently downbeat US housing numbers to offer the decision-makers another reason to reject the dialing back of the easy money policies.
Amid these plays, US 10-year Treasury yields rebound from February levels whereas the measure of market volatility, CBOE Volatility Index, or VIX, reverses most of the previous day’s jump from a two-month top.
Moving on, investors will keep their eyes on the Senate developments and earnings for fresh impulse.
Read: Forex Today: Fears cooled but remain in the background
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.