In a day of mixed trading on Tuesday, US equity indexes reflected varied investor sentiment, with the Dow Jones Industrial Average managing a slight gain largely driven by robust performance in the financial sector. Meanwhile, the technology sector faced challenges, resulting in a decline as investors braced for the upcoming earnings reports from major tech firms. The Nasdaq composite index experienced a notable drop of 1.6%, settling at 17,093.7, while the S&P 500 followed closely with a decrease of 0.8%, concluding the day at 5,418.5.
The Dow, however, exhibited relative resilience with a marginal increase of 0.1%, reaching 40,580.8 after witnessing gains of up to 0.5% earlier in the trading session. The primary upward movements were noted in the financial and energy sectors, while the technology and consumer discretionary sectors lagged significantly behind. As the week progresses, US equity investors are keenly observing any indications from the Federal Reserve regarding the timeline for its monetary easing cycle.
Additionally, the forthcoming earnings reports from multi-billion dollar tech companies are anticipated to provide critical insights that could dictate further rotations in investment strategies. The Federal Open Market Committee is poised to announce its latest monetary policy decisions on Wednesday.
Current market observations indicate a striking 96% probability that the FOMC will maintain its key interest rates steady on July 31. However, projections also suggest an 88% likelihood of a rate cut on September 18, coinciding with growing evidence that inflation is shifting toward a more stable trajectory in alignment with the Fed's 2% target, especially amid signs of a softening labor market. In the realm of economic indicators, a report from the Bureau of Labor Statistics revealed a decrease in US job openings, falling to 8.184 million in June from 8.230 million in May.
Despite this decline, the figures still surpassed projections, as analysts had anticipated only 8 million openings based on a Bloomberg survey. This number equates to 4.9% of total employment, consistent with the previous month, yet lower than the 5.5% reported one year prior. Furthermore, consumer confidence, as measured by the Conference Board, rose to 100.3 in July, up from a downwardly adjusted 97.8 in June, exceeding the expected 99.7 as indicated by Bloomberg's survey. In the Treasury bond market, most yields saw reductions, with the 10-year note slipping 3.6 basis points to settle at 4.14%, and the two-year rate decreasing by 3.1 basis points to 4.35%. Major technology companies, including Microsoft ($MSFT) and Advanced Micro Devices ($AMD), are slated to announce their quarterly earnings after the market closes.
Over the past month, the technology sector has seen a general decline, even as quarterly results from heavyweights like Alphabet (GOOG, GOOGL) failed to alleviate the downward trend. Currently, of the technology firms within the S&P 500 that have reported as of last Friday, only a 3% increase in sales has been achieved, significantly falling short of FactSet's estimated growth of 9.3% for Q2, based on June 30 data.
The earnings growth metrics stand at 16.1%, slightly above the projected 15.7%. In specific company news, Howmet Aerospace ($HWM) reported a substantial increase in its Q2 adjusted earnings and revenues, exceeding market expectations and consequently raising its guidance for 2024. This positive momentum led to a remarkable 12.3% surge in its stock price during intraday trading, marking it as the top performer on the S&P 500. Conversely, Merck ($MRK) faced a significant setback, with its shares nosediving by 9.5% intraday after the company adjusted its full-year earnings forecast downward. Delta Air Lines ($DAL) has reportedly engaged attorney David Boies to seek potential damages from CrowdStrike Holdings ($CRWD) and Microsoft, following an outage that occurred earlier in the month, according to a recent report by CNBC.
This news has had a pronounced impact, resulting in an 11.1% drop in CrowdStrike's stock price, making it the worst performer on both the Nasdaq and S&P 500 indices. On the commodities front, West Texas Intermediate crude oil prices experienced a slight dip of 0.8%, settling at $75.22 per barrel, while gold prices appreciated by 1.1% to reach $2,451.30 per ounce, and silver prices climbed 1.9% to $28.39 per ounce..