Tech Rally Drives Up Stocks as Earnings Roll In: Markets Wrap

(Bloomberg) — A renewed rally in some of the world’s largest technology companies propped up the US stock market, with traders weighing another big batch of corporate earnings.

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Equities edged higher, with Tesla Inc. leading gains in megacaps as chief Elon Musk vowed to launch less-expensive vehicles. Chipmakers also caught a bid on a bullish forecast from Texas Instruments Inc. Later Wednesday, Meta Platforms Inc. is due to report results, and Wall Street will be focused on whether the social-media giant will give any signs of returns from the hefty spending on artificial intelligence.

“Stocks have regained a steadier footing after three weeks of consecutive declines,” said Solita Marcelli at UBS Global Wealth Management. “A strong earnings season looks likely to help restore market confidence.”

An indicator from JPMorgan Chase & Co.’s trading desk that tracks stock allocations reached a threshold typically followed by gains. The US Tactical Positioning Monitor triggered level that shows an “attractive set-up” for S&P 500, according to Andrew Tyler. The US equity benchmark gained roughly 3% in the subsequent 20 days after the indicator reached a similar level.

The S&P 500 topped 5,080, rising for a third straight day. The tech-heavy Nasdaq 100 climbed 1%. Treasury 10-year yields rose four basis points to 4.64%. The US will sell a record $70 billion of five-year notes at 1 p.m. New York time.

The yen weakened beyond 155 per dollar for the first time in more than three decades, fueling risk that the key level may prompt Japan to step into the market. Oil fell, though traders kept a close eye on geopolitical risks after Israel said it struck around 40 sites linked to Hezbollah in southern Lebanon.

Interest rates staying elevated longer, along with economic uncertainty and geopolitical turmoil have lessened the appeal of some of the stock market’s cheapest strategies.

Investors this month have pulled some $200 million out of value based exchange-traded funds, according to data compiled by Bloomberg Intelligence. In contrast, growth stocks have attracted more than $3 billion in inflows — despite a shaky stock market that’s raised concerns of more downside to come. That diminished interest in cheap stocks comes on the heels of lackluster performances of common value products.

Corporate Highlights:

Boeing Co. burned through $3.93 billion in cash in the first quarter, a less dramatic drain than analysts had predicted, as the embattled planemaker continues to slow output to get a handle on its manufacturing issues.
B. Riley Financial Inc.’s auditors signed off on its annual report and the firm said a new internal review found no connection with a controversial former business partner.
Amazon.com Inc. and Microsoft Corp.’s investments into artificial intelligence startups will get deeper scrutiny from the UK’s antitrust watchdog, the latest example of how global regulators are grappling with how the world’s largest technology firms are influencing the booming market.
AT&T Inc. beat analysts’ estimates for profit in the first quarter as it added more wireless phone customers than expected.
Biogen Inc. reported first-quarter profit that beat Wall Street’s expectations as the biotech giant’s new Alzheimer’s drug Leqembi gained traction and cost cuts took hold.
Visa Inc. reported a quarterly profit that beat Wall Street predictions as US credit-card spending climbed.
Humana Inc.’s management pulled its guidance for next year amid mounting pressures in its Medicare business but said it’s on track to meet its goals for 2024.
Hasbro Inc. reported first-quarter earnings that beat estimates, a promising sign for the company’s turnaround efforts.
Mattel Inc. reported a smaller-than-expected first-quarter loss, benefiting from fast sales of its Hot Wheels miniature cars and lower costs.
Solar manufacturers are asking the US government to slap duties on $12.5 billion of imported panels from Southeast Asia, setting the stage for a sweeping trade probe that threatens to make power projects more expensive.

Key events this week:

US GDP, wholesale inventories, initial jobless claims, Thursday
Microsoft, Alphabet, Airbus earnings, Thursday
Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
US personal income and spending, PCE deflator, University of Michigan consumer sentiment, Friday
Exxon Mobil, Chevron earnings, Friday

Some of the main moves in markets:

Stocks

The S&P 500 rose 0.4% as of 9:51 a.m. New York time
The Nasdaq 100 rose 1%
The Dow Jones Industrial Average was little changed
The Stoxx Europe 600 was little changed
The MSCI World index rose 0.5%

Currencies

The Bloomberg Dollar Spot Index rose 0.1%
The euro was little changed at $1.0691
The British pound was little changed at $1.2448
The Japanese yen fell 0.1% to 154.99 per dollar

Cryptocurrencies

Bitcoin fell 0.2% to $66,191.51
Ether rose 1.3% to $3,252.39

Bonds

The yield on 10-year Treasuries advanced four basis points to 4.64%
Germany’s 10-year yield advanced seven basis points to 2.57%
Britain’s 10-year yield advanced eight basis points to 4.32%

Commodities

West Texas Intermediate crude fell 0.6% to $82.87 a barrel
Spot gold fell 0.1% to $2,319.50 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Alexandra Semenova and Carly Wanna.