4.10pm: Markets slide ahead of key earnings reports
US stocks fell below the flatline by Tuesday's close as investors wait to see if Alphabet and Tesla will beat expectations when their earnings reports drop on Tuesday evening.
The S&P 500 and Dow Jones dropped 0.2% and 0.1% respectively, while the Nasdaq finished near flat.
Small caps gained, with the Russell 2000 rising 3% over the past two days.
The market awaits results from Alphabet and Tesla for further insights into growth trends.
12.15pm: June home sales fall from 2019 levels
US stocks continued their gains by midday Tuesday, with the S&P 500 up about 0.3%, the Nasdaq Composite rising 0.6%, and the Dow Jones increasing by more than 0.1%.
Earnings reports from General Motors and Coca-Cola proved to be a mixed bag, with GM’s poor China performance putting pressure on shares while Coca-Cola surprised to the upside.
Meanwhile, existing home sales fell 5.4% in June, marking the fourth consecutive monthly decline amid high mortgage rates.
Existing home sales fell to 3.89 million, a significant drop from the five million-plus pace in 2019. The decline was primarily due to reduced buyer activity in the Midwest and South.
Housing affordability remains near its lowest level since the Great Financial Crisis due to a shortage of homes, and median prices continue to rise. Additionally, condo sales dropped to a near-term low, excluding the pandemic period.
“The low supply of homes and high interest rates depressed affordability to near-term lows,” noted Jeffrey Roach, chief economist for LPL Financial.
“Because of the tight supply of homes available for sale, median prices continue to trudge higher. We should not expect that dynamic to improve until mortgage rates drop and supply increases.”
9.52am: Quick recovery
After a slight stumble at the start, Wall Street's main indices have quickly jogged higher.
The Nasdaq Composite index is already up 0.25% and the S&P 500 0.16% higher, while the Dow Jones is just lagging slightly in the red.
Meta Platforms and Tesla are among the key drivers, both up around 1%, followed by Amazon, Microsoft and Alphabet, with Nvidia roughly flat, offsetting small losses for Apple.
The Coca-Cola Company (NYSE:KO) rose 1.4% on the back of beating earnings estimates, while United Parcel Service Inc (NYSE:UPS) fell 12.6% after its bottom line missed the Street forecast.
Diagnostics giant Danaher Corporation (NYSE:DHR) jumped 7% after earnings and revenue topped estimates.
Data analytics firm MSCI Inc (NYSE:MSCI) leapt over 11% higher after profit and revenue both impressed, driven by a jump in subscription revenue.
9.27am: US soft landing expected
The S&P 500 index should end the higher slightly higher than current levels, Barclays said today, upgrading its forecast for the US equity benchmark on expectations of a soft landing for the economy.
Barclays upped their year-end estimate to 5,600 from 5,300, joining fellow investment banks that have increased their estimates in recent days.
Yesterday the index ended the session at just over 5,564.
"While our valuation assumption for Big Tech is high, growth-adjusted multiples are reasonable and we expect the group to earn into its valuations," Barclays strategists said in a note.
UBS also put out a note saying it also sees a "soft landing" scenario as increasingly likely, based on recent economic data.
"The recent news flow generally supports our base case scenario of a soft landing with inflation slowing and the Fed gradually cutting rates," said UBS economist Brian Rose.
Even if second-quarter GDP growth comes in above 2%, as many are expecting, "we would not take it as a sign that growth will be strong in the near term.
"At the same time, we also see little evidence of an imminent hard landing.
"In our view, the strength of consumer demand will be the main determinant of how the economy develops, as it would be difficult for the recovery to continue if consumers were to suddenly pull back on spending.
"Softer demand is helping to reduce inflationary pressure."
8.49am: Spotify dances to three-year high
Spotify Technology SA (NYSE:SPOT) shares danced 14% higher premarket, which marks a three-year high, after the music and podcast streamer smashed forecasts.
Seven million new Premium subscribers were added in the quarter, one million more than previously anticipated.
This more than offset the lower-than-expected monthly active user (MAU) count of 626 million.
7.59am: Nasdaq to lead falls
Wall Street stocks are predicted to open lower on Tuesday, giving up some of the previous day's gains as the dollar picks up.
Big tech stocks, which led the rally at the start of the week, are expected to fall furthest, with Nasdaq 100 futures down 0.34%.
Dow Jones futures are down 0.1% and those for the S&P 500 are down 0.2%. Futures for the Russell 2000 small- and mid-cap index are flat.
This comes a day after the Nasdaq added 1.6%, the S&P 1.1% and the Dow 0.3%.
Tuesday is the start of the big tech earnings season, with two of the Magnificent Seven tech stocks, Alphabet and Tesla, reporting after the closing bell.
With the economic calendar being relatively quiet, investors are closely monitoring US earnings releases, says market analyst Fawad Razaqzada at City Index, in a week when 29% of the S&P 500 companies set to report.
Coming after this group of seven's shares experienced a sharp decline in recent weeks, many are saying tonight's results will have a significant influence on what directions markets go.
According to FactSet, the 'Mag 7' companies are anticipated to significantly boost S&P 500 earnings for the second quarter, with Nvidia, Amazon, Meta and Alphabet expected to be among the top five contributors to the index's year-over-year earnings growth for the past quarter.
Collectively, these firms are projected to achieve a 56.4% year-over-year earnings growth for the quarter.
Without these four, the blended earnings growth rate for the other 496 S&P 500 companies would be 5.7% for Q2 2024, estimates Factset, with blended earnings combining actual and estimated results.
Overall, the blended earnings growth rate for the entire S&P 500 for the second quarter is expected to be 9.7%.