Global Equities Rise Despite Tech Earnings Disappointments
- Global equities surged on the back of positive earnings and data, with European indices hitting record highs.
- Tech sector earnings fell short of expectations, raising concerns about AI spending and trade uncertainty.
- Nasdaq 100’s struggle to break above 21,800 could lead to increased volatility across markets.
Investors were met with a flurry of earnings reports during Thursday’s trading session, driving global equities and US index futures higher. The positive sentiment was further supported by stable Treasury yields and a lack of new trade tensions on the geopolitical front.
European markets soared to new highs, fueled by strong corporate earnings, robust economic data, and expectations of further interest rate cuts. In contrast, US indices failed to reach new records, hinting at a possible slowdown in bullish momentum. President Trump’s decision to delay tariffs on Mexico and Canada provided some relief, but uncertainties around trade negotiations with China persist.
While tech firms have been reporting earnings misses, investors have mostly shrugged off the negative results. However, a broader tech slump could trigger a market correction if more companies fail to meet expectations.
Volatility Eases as Focus Shifts to Economic Indicators
Following recent market turbulence caused by trade policies, investors are turning their attention back to economic fundamentals, corporate earnings, and interest rate outlooks. The Treasury yield remains near recent lows, supporting equity markets amid concerns about trade tensions and inflation.
However, President Trump’s unpredictable trade rhetoric poses a significant risk to market stability, with his protectionist tweets capable of disrupting sentiment at any moment.
Earnings Spotlight on Amazon, Qualcomm, and Alphabet
Amazon is gearing up to release its quarterly earnings, with a keen eye on its AI spending plans amidst growing competition in the sector. Qualcomm exceeded expectations in its first-quarter results, driven by increased demand for smartphones powered by AI. Alphabet, on the other hand, faced challenges as revenue forecasts disappointed and cloud revenue growth slowed.
Concerns over Alphabet’s capital expenditure plans and potential overinvestment in AI have added to the stock’s woes. Advanced Micro Devices also faced a setback after reporting weaker earnings, casting doubt on the semiconductor sector’s growth prospects.
US Jobs Data and Fed Rate Expectations
Investors await crucial macroeconomic data, including the US jobs report and Friday’s retail figures. Any signs of weakness in the labor market could fuel expectations of a Federal Reserve rate cut, providing further support for equities. As markets digest earnings and economic data, the focus remains on the sustainability of the current risk asset rally.
Nasdaq 100 Trade Ideas and Key Levels
Despite recent market recovery, the Nasdaq 100 remains within a consolidation pattern since December, signaling potential concerns. The index’s failure to break above 21,800 raises caution, especially with some tech stocks underperforming. Traders should monitor resistance levels around 21,800 and support levels near 21,600 and 21,500 for potential market direction.
While the bullish trend remains intact for now, a substantial breakdown of support levels could shift market sentiment toward a bearish outlook.
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Disclaimer: This article provides informational content and does not constitute investment advice or recommendations. It aims to inform readers about market developments and potential risks, without influencing investment decisions.
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