The major stock indexes opened higher on Wednesday morning, continuing their strong start to 2024 amid a busy earnings season.
The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all gained around half a percent in early trading.
“We’re seeing optimism around corporate earnings boost the major indexes so far this year,” said Tobi Opeyemi Amure, an analyst at Trading.Biz. “While economic uncertainties remain, companies seem to be finding ways to drive profits regardless of the macro environment.”
Some key details on Wednesday’s trading:
- The Dow added 0.3%, the S&P 500 climbed 0.5%, and the Nasdaq rose 0.5% shortly after the open. Six of the seven mega-cap “Magnificent 7” tech stocks were higher, led by gains in Apple and Microsoft.
- Stocks have shown resilience even as Treasury yields ticked higher ahead of a large government bond auction. The policy-sensitive 2-year yield rose 1 basis point to 4.41%, while the 10-year yield added 3 basis points to 4.13%.
- Market volatility has eased significantly since 2023. The Cboe Volatility Index, or VIX, fell below 17 this week – down dramatically from peaks above 30 last year.
“With inflation showing signs of peaking and the Fed projecting slower rate hikes ahead, markets seem confident the worst is over for now regarding economic growth,” Tobi said.
The latest batch of quarterly results and guidance is helping dictate market action to start 2024.
Major companies reporting numbers this week include:
- Snap: Shares jumped over 10% after the social media platform’s revenue topped estimates. The company highlighted momentum with its emerging products.
- Ford: The automaker beat profit expectations and issued an upbeat forecast for 2023. However, Ford warned of lingering supply chain headaches.
- Alibaba: The Chinese e-commerce giant beat analyst expectations for earnings and revenue amid a challenging environment.
- Uber: The ride-sharing firm reported record quarterly revenue but noted that rising costs are impacting margins.
The financial sector remains a key focus, with quarterly updates this week from companies including SoftBank, Prudential, and MetLife. Walt Disney’s fiscal first-quarter results are also on tap after Wednesday’s closing bell.
“We’ll be watching closely to see if corporations can continue driving earnings growth even as consumers show more caution and economic hurdles persist globally,” said Tobi. “The outlooks management teams provide today could be crucial for market sentiment in the months ahead.”
