Coca-Cola and Sherwin-Williams Earnings Lift Dow Jones 358 Points
Earnings for several companies this week have already come in higher than anticipated, but Megacap earnings are still to come.
Earnings from major companies came in better than expected, pushing the Dow Jones Industrial Average 0.7% higher, or 358 points as both the S&P 500 and Nasdaq dipped.
Sherwin-Williams (SHW) posted revenue of $6.79 billion for the second quarter, and their stock jumped almost 6%. The paint company beat Wall Street estimates with earnings per share of $3.70 against expected EPS of $3.52.
Coca-Cola (K) also impressed by reporting EPS of $0.97 compared to the expected $0.93. Their stock climbed 2%, and the beverage giant recorded revenue for the quarter of $13.38 and increased the full year outlook.
Dow Climbs with Chip Stocks Pulling Nasdaq Down
This is a very important week for earnings, especially on the tech side. Amazon (AMZN), Meta Platforms (META), Apple (APPL), and Microsoft (MSFT) will all report their quarterly earnings. These companies are going to be under close scrutiny for their profit margins and capex spending, since that has become a topic of fierce controversy among investors and analysts.
Chip stocks continued the previous day’s decline with losses in early morning trading for Tuesday. Astera Labs (ALAB), Seagate Technology (STX), and other chip stocks slipped. With Micron Technology (MU) dropping by 5% and VanEck Semiconductor ETF (SMH) down 3%, the sector is looking bearish. Because chip stocks have swung so wildly between highs and lows in recent weeks, there is every reason to believe that these same stocks will rebound in the coming days, but they may not make up as much ground as they lost.
The Nasdaq dropped 0.9% while the S&P 500 fell only slightly. The upcoming tech earnings for this week could pull the market dramatically in one direction or another, especially if profit margins are focused on and do not look as wide as they should.
The markets continue to feel the pull from the Iran-U.S. conflict which took a break this week. Oman and Saudi Arabia talked peace with Iran and negotiated a means to reopen the Strait of Hormuz. Oil prices continued to fall from their Monday dip, with the West Texas Intermediate losing 0.92% and Brent crude oil falling 1.56% to $80.71. These benchmarks show indications of returning to normal, but if the Iran conflict heats back up, we can expect further volatility in the gas market. With that market settling, though, investors can focus on the Megacap earnings this week and their impact on the rest of the stock market.
Investors are awaiting a Fed decision on Wednesday. Monetary policy may not change much right away, but the Federal Reserve could lay out a path ahead for the future. The next price hike is not expected until September, but with a new chairman in place, Fed operations could get shaken up.
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