Wall Street Close: Benchmarks gain over 1.5% on earnings optimism, stimulus hopes
- 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
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
