The Dow Jones Industrial Average’s (DJI) surge to record highs painted a bright picture for investors, with an incredible 742-point gain on Tuesday, marking its best performance in over a year. While the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) experienced pullbacks as tech stocks took a hit, the former still touched a record peak earlier in the week. The market displayed its familiar rollercoaster ride, with the Dow poised for a strong weekly performance, contrasting with the other major benchmarks, particularly the Nasdaq, eyeing losses after six weeks of gains. As earnings season kicked off and big banks rolled out reports, Wall Street’s hopes for a near-future rate cut gained momentum.
Insights from the Tech Sector
Amidst investor shifts from tech to cyclical stocks, certain tech giants made waves. Taiwan Semiconductor saw a retreat from its record high, while Palantir Technologies hit a three-year peak. Netflix celebrated strong second-quarter results driven by subscriber growth, even though their current-quarter forecast left a sour note. Microsoft saw a step back from record highs in early July but maintained technical support. On the other hand, semiconductor stocks faced pressure as the Biden administration tightened trade restrictions with China, and CrowdStrike’s cybersecurity update caused a global IT outage.
Analyst Outlook This Week
The week witnessed a flurry of rating adjustments from the brokerage community with significant impacts on various stocks. Shopify soared post an upgrade from Bank of America. elf Beauty and Arm Holdings grabbed bullish notes, whereas Baxter International faced a downgrade due to margin concerns. Gap received the coveted title of “top pick” from Morgan Stanley.
Upcoming Events to Watch
The horizon is filled with economic data and earnings reports as July heads towards a close. Investors can use Expectational Analysis® to ride the waves of earnings season and turn a profit. Schaeffer’s Research experts, including Todd Salamone and Rocky White, delved into the recent market sentiment and small caps’ outperformance, offering insights on what it could signify for stocks.
