Stock Market Snapshot: Mixed Results Amid Key Economic Indicators

Investors React to Strong Consumer Confidence and Upcoming Earnings Reports

The S&P 500 Index ($SPX) (SPY) closed on Tuesday with a modest increase of +0.16%. In contrast, the Dow Jones Industrials Index ($DOWI) (DIA) declined by -0.36%, while the Nasdaq 100 Index ($IUXX) (QQQ) experienced a notable rise of +0.98%.

Strength in stocks was bolstered by a surprising increase in the US consumer confidence report. Although higher Treasury note yields posed a challenge initially, they later subsided. The tech sector, particularly the Magnificent Seven and chip companies, propelled the Nasdaq to a new 3-3/4 month high.

The Dow Jones Industrials index suffered from negative breadth, with only 7 of the 30 Dow stocks gaining ground. A sense of caution loomed over the market ahead of critical events this week, such as the anticipated earnings reports from over 40% of the S&P 500’s market capitalization, Thursday’s September PCE price deflator, Friday’s unemployment report, and next Tuesday’s US elections.

Notably, five of the Magnificent Seven stocks are set to release their earnings this week. Alphabet shared its earnings following Tuesday’s market close, while Meta and Microsoft will report on Wednesday. Amazon and Apple follow on Thursday.

The Conference Board’s October US consumer confidence index climbed +9.5 points to reach a 9-month high of 108.7, exceeding expectations for a smaller increase to 99.5. This boost was the most significant in three years and was attributed to consumers perceiving the job market as robust.

Additionally, the US home price reports exceeded forecasts. The FHFA house price index increased by +0.3% month-over-month, better than the anticipated +0.1%. Similarly, the S&P CoreLogic CS 20-City US home price index rose by +0.35% month-over-month and +5.20% year-over-year, surpassing expectations of +0.20% and +5.10% respectively.

On the employment front, October JOLTS job openings decreased to a 3-3/4 year low of 7.443 million jobs, falling short of expectations of 8.0 million and down from August’s revised 7.861 million.

The September US trade deficit widened to $108.2 billion, marking a larger gap than the anticipated -$96 billion, and up from August’s revised -$94.2 billion, indicating potential negative implications for Q3 US GDP.

With Q3 corporate earnings season underway, 76% of S&P 500 companies that have reported thus far have surpassed estimates. Bloomberg Intelligence projects a +4.3% year-over-year increase in quarterly earnings for the S&P 500 in Q3, a reduction from the +7.9% growth projected in July.

The market’s expectations are firmly favoring a 96% chance of a -25 basis point rate cut at the November 6-7 FOMC meeting, while a -50 basis point cut at that meeting holds a 0% likelihood.

Overseas stock markets exhibited mixed results on Tuesday. The Euro Stoxx 50 dropped by -0.40%, China’s Shanghai Composite index decreased by -1.08%, whereas Japan’s Nikkei Stock 225 gained +0.77%.

Interest Rates

December 10-year T-notes (ZNZ24) rose slightly, closing up 1.5 ticks. Although the 10-year T-note yield reached a new 3-3/4 month high, it ultimately ended down -2.0 basis points at 4.262%.

Initially, T-note prices were pressured by the strong consumer confidence report and supply concerns ahead of the auction of 7-year T-notes. Additionally, worries surrounding the US budget deficit persisted regardless of the upcoming presidential election. However, prices rebounded later in the day due to robust demand for the 7-year T-note auction, which resulted in a lower-than-expected auction yield.

European government bond yields increased, with the 10-year German bund yield climbing +5.1 basis points to 2.337%, and the 10-year UK gilt yield rising +6.1 basis points to 4.315%. Swaps indicate a 100% certainty of a -25 basis point rate cut by the ECB at its December 12 meeting and a 41% chance for a -50 basis point cut.

US Stock Movers

The Magnificent Seven stocks collectively contributed to the market’s upward movement on Tuesday, with all stocks except Tesla (TSLA) gaining, the latter declining by -1.45%. Alphabet (GOOG) rose by +1.91% prior to its earnings release. Other tech giants also posted positive results: Meta Platforms (META) increased by +2.68%, Microsoft (MSFT) by +1.43%, Amazon (AMZN) by +1.35%, Nvidia (NVDA) by +0.68%, and Apple (AAPL) by +0.33%.

Semi-conductor stocks were among the standout performers. Arm Holdings (ARM) surged by +4.77%, Broadcom (AVGO) gained +4.20%, AMD (AMD) increased by +3.96%, Lam Research (LRCX) rose by +3.79%, and ON Semiconductor (ON) advanced by +3.41%.

Conversely, oil-related stocks faced ongoing pressures as oil prices continued to decline, following a -6% drop on Monday. Chevron (CVX) fell by -1.13%, Exxon (XOM) by -1.15%, Occidental Petroleum (OXY) by -0.87%, and Marathon Oil (MRO) by -0.67%.

However, airline and transportation stocks showed strength as oil prices fell. Delta Air Lines (DAL) gained +3.76%, American Airlines Group (AAL) rose +1.84%, and United Airlines (UAL) increased by +1.32%. Cruise lines also fared well, with Royal Caribbean Cruises (RCL) climbing by +3.46% and Carnival (CCL) by +1.04%.

In contrast, Ford (F) plummeted by -8.25% due to concerns about the impact of high costs on profit margins.

DR Horton (DHI) dropped by -7.04% following a disappointing revenue forecast for 2025. This report negatively affected the homebuilder sector, with PulteGroup (PHM) down -3.00%, Lennar (LEN) down -2.08%, and KB Home (KBH) down -1.74%.

Boeing (BA) saw a rally of +1.74% after successfully completing a $21 billion public share sale to reduce debt and avert a potential junk status downgrade.

Coinbase (COIN) increased by +1.87% as bitcoin prices rose by +4.20%, following a +4.12% uptick on Monday.

Earnings Reports (10/30/2024)

Several companies are set to report earnings soon, including: Zimmer Biomet Holdings Inc (ZBH), Humana Inc (HUM), Caterpillar Inc (CAT), Exelon Corp (EXC), Garmin Ltd (GRMN), Dayforce Inc (DAY), Vulcan Materials Co (VMC), Trane Technologies PLC (TT), Verisk Analytics Inc (VRSK), Hess Corp (HES), Fortive Corp (FTV), Automatic Data Processing Inc (ADP), Biogen Inc (BIIB), AbbVie Inc (ABBV), GE HealthCare Technologies Inc (GEHC), Kraft Heinz Co/The (KHC), Bunge Global SA (BG), Bio-Techne Corp (TECH), Otis Worldwide Corp (OTIS), Martin Marietta Materials Inc (MLM), Global Payments Inc (GPN), NiSource Inc (NI), Eli Lilly & Co (LLY), CDW Corp/DE (CDW), Smurfit WestRock PLC (SW), TE Connectivity PLC (TEL), Illinois Tool Works Inc (ITW), Booking Holdings Inc (BKNG), Arch Capital Group Ltd (ACGL), Clorox Co/The (CLX), Allstate Corp/The (ALL), CF Industries Holdings Inc (CF), Federal Realty Investment Trust (FRT), Everest Group Ltd (EG), Meta Platforms Inc (META), American Water Works Co Inc (AWK), Mid-America Apartment Community (MAA), Prudential Financial Inc (PRU), Equinix Inc (EQIX), Ventas Inc (VTR), MetLife Inc (MET), Cognizant Technology Solutions (CTSH), UDR Inc (UDR), Public Storage (PSA), Paycom Software Inc (PAYC), Invitation Homes Inc (INVH), MGM Resorts International (MGM), Gen Digital Inc (GEN), CH Robinson Worldwide Inc (CHRW), KLA Corp (KLAC), Equity Residential (EQR), eBay Inc (EBAY), Aflac Inc (AFL), GoDaddy Inc (GDDY), Microsoft Corp (MSFT), Starbucks Corp (SBUX), Monolithic Power Systems Inc (MPWR), and Amgen Inc (AMGN).

More Stock Market News from Barchart

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.