New York Stock Market Rises Early Amid Big Tech Earnings and Treasury Yield Watch

The three major indices of the U.S. New York stock market showed a unified upward trend in the early session on the 24th (local time), as investors closely watched the earnings reports of major big tech companies and movements in Treasury yields.

At around 10:07 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, which focuses on blue-chip stocks, was trading at the 33,157 level, up 221.48 points (0.67%) from the previous close. The S&P 500, centered on large-cap stocks, rose 26.99 points (0.64%) to the 4,244 level, while the tech-heavy Nasdaq index was up 101.75 points (0.78%) at 13,120.

All sectors except energy stocks in the S&P 500 were on the rise. Coca-Cola surged more than 3% compared to the previous close, buoyed by earnings that exceeded expectations. Spotify also jumped nearly 10% on strong results. General Motors (GM) showed about a 1% increase, also beating expectations. Alphabet, Google’s parent company, which is set to report earnings after the market close, rose 1.63%. Microsoft (MS) was trading slightly higher as well. Coinbase surged about 15%, supported by a strong Bitcoin rally.

[Image source=Reuters Yonhap News]

Investors are focusing on Treasury yield movements and corporate earnings, which have recently increased market volatility. As the third-quarter earnings season continues, Alphabet and MS, part of the Magnificent Seven that led the New York stock market’s rally in the first half of the year, will release their quarterly results after the market closes today. With strong revenue growth expected, attention is on whether these big tech companies’ earnings can revive investor sentiment, which has been dampened by recent sharp rises in Treasury yields and the war between Israel and the Palestinian militant group Hamas.

Pre-market earnings released today from Coca-Cola, Spotify, and GM all surpassed expectations. However, GM withdrew its previous full-year guidance, considering cost increases due to the United Auto Workers strike. According to FactSet, about 23% of S&P 500-listed companies have reported earnings so far, with 77% beating estimates. Meta Platforms and Amazon are scheduled to release earnings on the 25th and 26th, respectively. David Bensen, Chief Investment Officer at Bensen Group, told CNBC, "Whatever the results from this week’s big tech earnings, they do not justify their valuations," adding, "Despite the recent three-month decline in big tech stocks, they are still too expensive."

In the New York bond market, the benchmark 10-year U.S. Treasury yield is hovering around 4.86%. The 10-year yield, which had previously surpassed 5% and weighed on the stock market, has somewhat stabilized. The 2-year yield, sensitive to monetary policy, rose slightly to around 5.12%. Following reports that Wall Street heavyweights, including Bill Ackman of Pershing Square Capital, have closed short positions on bonds amid recession warnings, some still expect the 10-year Treasury yield to continue rising.

Jamie Dimon, Chairman of JPMorgan Chase, attending an event in Saudi Arabia, pointed out that the Federal Reserve’s economic forecasts are not accurate and warned, "I am cautious about what will happen next year." He also added that market interest rates could rise further.

This week, the U.S. third-quarter gross domestic product (GDP) growth rate and the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, will also be released. The September PCE price index is estimated to rise 0.4% month-over-month. The third-quarter economic growth rate is expected to reach the 4% range annually, a significant rebound compared to the low 2% range growth in the first and second quarters. Fed Chair Jerome Powell will deliver the opening speech at a Washington, D.C. event on the 25th, but as it is a blackout period during which officials are prohibited from commenting on monetary policy, no related remarks are expected.

Meanwhile, investors are also monitoring geopolitical risks stemming from the Middle East. Israeli Prime Minister Benjamin Netanyahu met with French President Emmanuel Macron, who visited Israel today, and compared Hamas’s attacks to the Holocaust, the genocide of Jews by Nazi Germany during World War II. President Macron proposed forming an international coalition to defeat Hamas.

European stock markets are rising today. Germany’s DAX index rose 0.38%, the UK’s FTSE index increased 0.14%, and France’s CAC index climbed 0.56%.