S&P500: Market Rallies as GM Stock Surges on Strong Earnings Today

Market Rebounds as Traders Await Key Earnings

U.S. stock futures held steady Tuesday following a strong market rebound, as investors prepare for crucial earnings reports from major tech companies after the close. Meanwhile, investors are digesting results from GM, Coca-Cola, Comcast and UPS, released before the opening bell.

Wall Street Rally

The S&P 500 surged over 1% on Monday, marking its best session since early June. The tech-heavy Nasdaq Composite outperformed with a 1.6% gain, while the Dow Jones Industrial Average edged up 0.3%. Small caps also showed strength, with the Russell 2000 climbing 1.7%.

Sector Performance

Information technology and communication services led the S&P 500 higher, gaining approximately 2% and 1.2%, respectively. This rally suggests a potential shift in investor focus towards smaller, more cyclical companies, as expectations grow for the Federal Reserve to begin lowering interest rates.

Earnings in Focus

General Motors (GM) reported strong second-quarter results, beating analyst expectations. The automaker’s shares rose nearly 5% in premarket trading.

Coca-Cola raised its full-year outlook after reporting better-than-expected earnings and revenue. The beverage giant now anticipates organic revenue growth of 9% to 10%, up from its previous forecast of 8% to 9%.

Comcast posted mixed results, missing revenue estimates due to tough comparisons in its film studio and theme parks segments. However, its streaming service Peacock continued to show growth.

UPS missed on both top and bottom lines, causing its stock to drop 7% in early trading. This disappointing report highlights potential challenges in the shipping and logistics sector.

Crypto ETFs Launch

Ether ETFs are set to debut in the U.S. on Tuesday, following the successful launch of bitcoin funds six months ago. Major asset managers and crypto-focused firms are entering this space.

Market Forecast

The market’s recent rotation from megacap tech to small-cap stocks appears to be continuing. Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report, suggests this trend could persist, especially if upcoming inflation data proves favorable. Investors should closely monitor earnings reports from tech giants like Alphabet and Tesla for further market direction.

Technical Analysis

E-mini S&P 500 Index futures are trading slightly better as we approach the opening bell. Early in the session, traders expect to encounter headwinds at 5631.75. Reaction to this level should set the tone for the session.

Since we’re in a strong uptrend, we’re not too worried about the upside. It’s managing risk that’s most important.

A failure to overcome 5631.75 will indicate the presence of sellers. If this generates enough downside momentum then we could see a test of the minor bottom at 5542.00, followed by the uptrending 50-day moving average at 5493.87.