Nasdaq 100 and S&P500: Mixed Earnings Reports Stir Market Volatility

Market Update: S&P 500 Attempts Recovery Amid Mixed Earnings

The S&P 500 struggled to rebound Thursday following its worst sell-off since 2022. Investors grappled with a flurry of earnings reports and fresh economic data, leading to a mixed market performance.

At 13:48 GMT, Dow Futures are trading 40157.00, up 47.00 or +0.12%. S&P 500 Index Futures are at 5463.50, down 8.50 or -0.16% and Nasdaq Futures are trading 19137.00, down 66.25 or -0.34%.

Earnings Drive Stock Movements

Several major companies reported earnings, causing significant stock price swings:

Ford Motor plummeted 13% after missing second-quarter earnings estimates due to warranty issues. Chipotle edged up 2% on better-than-expected results and increased restaurant traffic. American Airlines sank 6% following weak profit guidance for Q3, citing industry oversupply and low fares.

Honeywell shares fell nearly 5% after issuing guidance below analyst expectations. RTX jumped 3% on strong Q2 earnings, while Hasbro surged over 6% after raising its full-year guidance.

Tech Sector Under Pressure

The technology sector faced headwinds after disappointing results from Alphabet and Tesla. This prompted a rotation out of high-risk assets, including cryptocurrencies. Bitcoin fell 2% to $64,299, while Ether dropped 6% to $3,172.

IBM gained 3% after exceeding quarterly expectations and noting increased business tied to generative AI.

Bank of America Stake Reduction

Berkshire Hathaway continued to trim its position in Bank of America, selling 52.8 million shares worth $2.3 billion over six trading days. The conglomerate still holds a 12.5% stake valued at $41.3 billion.

Economic Growth Surprises

The U.S. economy grew at a 2.8% annualized rate in Q2, surpassing the expected 2.1%. This robust growth may influence the Federal Reserve’s future policy decisions.

Market Forecast

The near-term outlook appears cautiously bearish. Investors are rotating away from megacap tech stocks into small-caps and cyclical sectors. The market is in a “show me” state regarding AI profitability and productivity gains.

While certain areas like cruise lines and U.S. infrastructure show strength, technology leaders may face continued pressure. Traders should watch for further sector rotation and monitor upcoming earnings reports for signs of AI-driven results.

The market’s ability to recover from recent losses will likely depend on upcoming economic data and the Fed’s policy stance. Investors should remain vigilant and consider diversifying their portfolios to manage risk in this uncertain environment.

Technical Analysis

E-mini Nasdaq-100 Index futures are straddling a 50% level at 19178.50. Trader reaction to this level will determined the direction of the index into the close.

A sustained move over 19178.50 will signal the presence of buyers. If this creates enough momentum then look for a surge into the price cluster formed by the 50-day moving average at 19691.95 and the short-term pivot at 19742.25.

A failure to sustain a move over 19178.50 will indicate the presence of sellers or lack of buyers. This could lead to further selling pressure with the first target 18501.00, followed by the 200-day moving average at 18061.19.