Investing.com -- The Nasdaq closed at record highs Tuesday, shrugging off mixed economic data as tech continued to rack up gains ahead of major earnings.
At 4:00 p.m. ET (2000 GMT), the Dow Jones Industrial Average dropped 154 points, or 0.4%, the S&P 500 index gained 0.2%, and the NASDAQ Composite jumped 0.7% to a record closing high of 18,717.58.
Tech rallies ahead of Alphabet earnings
Big tech led the broader market higher just ahead of Alphabet's quarterly results due after the market closes.
"We think Street estimates for 3Q advertising growth are achievable, but we see limited opportunity for upside relative to estimates this quarter given," Wedbush said in a recent note, flagging several concerns including slowing search growth and increased competition for the tech giant's Youtube business.
Five of Wall Street’s “Magnificent Seven” are due to report earnings this week, with Google owner Alphabet (NASDAQ:GOOGL) set to report after the market close on Tuesday.
This will be followed by Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) on Wednesday, while Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) will report on Thursday.
This week’s earnings are set to act as a bellwether for the broader market, given the relative market capitalization of the five tech giants. Investors will be watching to see whether Wall Street’s biggest firms were able to generate strong returns on their sizeable investments in artificial intelligence over the past year.
“Putting it all together, risk flows over the last week, while positive, were rather subdued but kept net positioning for the S&P 500 net long and extended,” Citi strategists led by Chris Montagu said in a note.
Ford falls after cutting full-year profitability forecast
Ford (NYSE:F) stock fell 8% after the automaker tempered its full-year profit forecast, blaming supplier disruptions and warranty costs amid a global price war fueled by overcapacity.
"Ford 3Q24 results showed continued pressure from some of the issues that have hit them for a while, namely higher warranty reared its head again (this time in Pro)," UBS said in a recent note.
Vans parent VF Corporation (NYSE:VFC) leapt 27% after the company reported a profit for the first time in two quarters.
DR Horton (NYSE:DHI) stock dropped 7% after the homebuilder forecast 2025 revenue below estimates, while McDonald’s (NYSE:MCD) stock was flat despite reporting a drop in global sales.
Labor market demand cools, but consumer confidence jumps
Teh JOLTS job openings data, a measure of labor demand, for September unexpectedly fell, but the "pace of hiring picked up, lending some upside risk to our forecast for October payroll growth," Oxford Economics said on Tuesday.
The quits rate, meanwhile, fell to its lowest level since the pandemic, which is consistent "with wage growth continuing to slow and easing the inflationary impulse from the labor market," it added.
Further clues into the labor market will continue to dominate attention with the release of the jobless claims and the ADP (NASDAQ:ADP), or private payolls, report later this week, before the October jobs report due Friday.
Consumer confidence, meanwhile, jumped to highest since 2021 despite uncertainty about the election outcome.
Ahead of the nonfarm payrolls report, however, inflation will also garner interest. September's US core personal consumption expenditures price index - the Fed's preferred measure of inflation - on Thursday,/
The readings come just weeks before a Fed meeting, where the central bank is widely expected to cut interest rates by a smaller 25 basis points.
The U.S. presidential elections are also set to take place in the coming week, with voting set for Nov. 5.
Republican nominee Donald Trump and Vice President Kamala Harris are set for a tight race, although recent polls and prediction markets have tended to favor Trump.
(Peter Nurse, Ambar Warrick contributed to this article.)