Stock indexes bounced Tuesday, recouping some of the losses from what’s been a brutal April for many investors, as the market braces for a major round of earnings reports.
Stock indexes have officially shaken off last week’s selloff.
The benchmark S&P 500 rose 1.2% by late afternoon, storming toward what would be its largest single-day gain since Feb. 22, while the bluechip Dow Jones Industrial Average rose 0.7%, or 250 points, and the tech-heavy Nasdaq climbed 1.7%.
Should these levels hold, it will be the S&P’s highest close since April 12, the Dow’s since April 9 and the Nasdaq’s highest since last Tuesday.
Tuesday’s rally was broad, as shares of 79% of S&P companies were in the green, building off of Monday’s 0.9% gain as traders began to regain the risk appetite they lost during the S&P’s 5.5% decline over the first three weeks of April.
Among Tuesday’s biggest gainers were automaker General Motors (shares up 5%), medical technology giant Danaher (up 7%) and General Electric spinoff GE Aerospace (up 7%), each of whom enjoyed boosts after topping Wall Street expectations in their respective earnings reports.
Stocks will face another major earnings test after markets close Tuesday, with electric vehicle titan Tesla and credit card colossus Visa, two of the S&P’s 15 largest companies by market capitalization, due to disclose results. Other notable companies that will report earnings this week include Facebook parent Meta on Wednesday, Microsoft and Google parent Alphabet on Thursday and ExxonMobil on Friday.
Despite the broad rally and lack of recent headlines about the “magnificent seven” big tech stocks, earnings growth remains highly concentrated. The 495 companies listed on the S&P not named Alphabet, Amazon, Microsoft, Meta or Nvidia are expected to report a 6% decline in profits for the first quarter of 2024, according to FactSet, though the index is broadly expected to grow by 0.5%, thanks to the 65% projected bottom line growth for that quintet.
All three top indexes remain up 2% or more for the year, but are noticeably below their respective March peaks. Driving the April stall are added fears that the Federal Reserve will keep interest rates elevated due to potentially lingering price increases, caused by higher-than-expected inflation data and made worse by cresting geopolitical tensions in the Middle East.