On Tuesday, U.S. equity indexes exhibited a mixed performance as midday approached, reflecting a notable loss of momentum in the technology sector just before key earnings announcements from industry titans Alphabet and Tesla. The Nasdaq Composite experienced a slight gain, rising 0.1% to close at 18,027.1.
Meanwhile, the S&P 500 and the Dow Jones Industrial Average showed little change, settling at 5,566.2 and 40,425.8, respectively. Despite their slight upticks, all three indexes retreated from their intraday highs, primarily driven by a decline in energy and technological stocks. Notably, technology gave up all its intraday gains, indicating investor caution ahead of earnings reports.
Meanwhile, consumer discretionary stocks maintained their position as top performers, although they also eased from session highs. In a notable development, Treasury yields dropped, with the two-year yield decreasing by 3.4 basis points, landing at 4.49%, while the ten-year yield fell by 2.7 basis points to 4.23%.
This decline in yields often reflects investor sentiment towards riskier assets, suggesting that the market is bracing itself for the upcoming financial results. Investors are keenly anticipating the earnings report from Alphabet and Tesla after the bell, as market analysts emphasize the importance of these results for validating the recent peaks in equity markets.
In a recent note from D.A. Davidson, the firm highlighted that the outcomes of these reports could significantly influence market direction. Turning to company-specific news, SAP, a leading technology giant, made headlines with its stock jumping over 7% intraday, following the announcement of robust Q2 earnings and revenue figures.
In contrast, NXP Semiconductors experienced a significant downturn, with shares plummeting by 9% intraday, responding poorly to the release of disappointing Q2 earnings and revenue reports. In another important update, United Parcel Service revealed that it fell short of Q2 estimates, leading the company to moderate its full-year revenue guidance.
The package delivery service has observed a trend where U.S. customers continue to trade down between its services, causing shares to slump over 13% intraday, marking it as the most significant loser on the S&P 500. On a more positive note, Coca-Cola announced an upward revision of its full-year outlook after reporting stronger-than-expected fiscal Q2 earnings, which were bolstered by gains in both volume and pricing.
However, the beverage giant's shares only saw a modest increase of less than 1%. In a broader economic context, data from the Richmond Federal Reserve indicated a decline in the monthly manufacturing index, falling to minus 17 in July compared to minus 10 in June. This outcome mirrored expectations for an improved index, underscoring a more rapid pace of contraction within the sector.
This trend aligns with the Empire State index while contrasting with the Philadelphia Fed index, which suggested signs of expansion. Further exacerbating the market sentiment, the pace of existing home sales in the U.S. decreased by 5.4%, dropping to a seasonally adjusted annual rate of 3.89 million in June from 4.11 million in May.
This decline was reported by the National Association of Realtors, reflecting the slowest sales figures since December 2023 and showing a 5.4% decrease compared to a year earlier. In commodity markets, West Texas Intermediate crude oil saw a decline of 1.7%, settling at $77.09 per barrel, while gold prices rose moderately by 0.5% to $2,406.52 an ounce.
Silver, however, faced a slight dip to $29.3. Looking ahead, the American Petroleum Institute is set to release its weekly update on U.S. oil inventories later in the day, with the official data from the Energy Information Administration expected on Wednesday morning. In summary, the U.S. equity market showcases a mixed performance as it braces for crucial earnings announcements from major technology firms, highlighting significant movements in stocks such as SAP, Tesla, and Coca-Cola..