In a positive turn for the US equity markets, indexes showed significant advancement, led predominantly by gains in the consumer discretionary and technology sectors during midday trading on Tuesday. The Nasdaq Composite reflected a notable increase of 0.5%, reaching a level of 18,104.8, while the S&P 500 advanced by 0.3% to 5,581.5, and the Dow Jones Industrial Average rose 0.2%, settling at 40,498.5.
Most sectors experienced uplift, except for energy, utilities, and consumer staples, which lagged behind. Meanwhile, Treasury yields witnessed a decline, as the two-year yield dropped by three basis points to 4.49%, and the ten-year yield fell by 3.3 basis points, marking 4.23%. All eyes are on the upcoming quarterly results from tech stalwarts Alphabet ($GOOGL) and Tesla ($TSLA), expected to be announced after the market closes today. In noteworthy corporate performances, SAP ($SAP), the prominent technology company, surged more than 6% in intraday trading due to a report of stronger-than-expected Q2 earnings and revenue from the prior day.
On the contrary, NXP Semiconductors ($NXPI) faced a downturn, plummeting 9% intraday after disclosing disappointing results for Q2 in terms of both earnings and revenue, positioning them as laggards in the Nasdaq. Further developments from the corporate front included United Parcel Service ($UPS), which reported results that fell short of Q2 estimates.
The logistics giant has adjusted its full-year revenue guidance, expressing concerns that US customers may continue seeking less expensive alternatives among their offerings. As a result, UPS shares plunged more than 13% intraday, marking them as the worst performer on the S&P 500. Conversely, Coca-Cola ($KO) presented a more promising outlook, revising its full-year estimates upwards due to fiscal Q2 earnings that exceeded expectations, driven by significant gains both in volume and pricing strategies. Looking at the broader economic landscape, the Richmond Federal Reserve's monthly manufacturing index displayed deterioration, falling to minus 17 in July, down from minus 10 in June.
This result was contrary to economists' expectations, which had anticipated an improvement to minus 6 according to a Bloomberg survey. The index reflects an accelerating contraction pace in the manufacturing sector, consistent with similar readings from the Empire State, yet it stands in contrast to the more optimistic Philadelphia Fed index readings that indicated possible expansion. Adding to the day's developments, the price of West Texas Intermediate crude oil experienced a decline of 1.9%, settling at $76.88 per barrel.
As the markets evolve, investors will be keen to monitor these economic indicators alongside corporate earnings results unfolding over the coming weeks..