Alphabet Earnings Beat Lifts Nasdaq and S&P 500 as IBM’s 6% Drop Drags Dow

U.S. stocks saw a mixed start on Thursday, with the Nasdaq Composite and S&P 500 indices rising amid strong premarket performance by Alphabet Inc., while the Dow Jones Industrial Average dipped due to a sharp decline in IBM shares. The Nasdaq Composite opened higher, driven by gains in Alphabet’s stock following its second-quarter earnings report, which exceeded Wall Street expectations. The S&P 500 also reached new intraday highs, though the Dow fell under pressure from IBM’s 6% drop after the company reported an earnings miss [1].

Alphabet’s results served as a catalyst for the market, with its shares rising in premarket trading. The company’s earnings beat, coupled with its optimistic outlook for the artificial intelligence sector, boosted investor confidence in tech stocks. Analysts noted that Alphabet’s performance aligned with a broader trend of strong earnings from leading technology firms, reinforcing bullish sentiment in the sector. Related companies, such as Nvidia, saw gains as investors anticipated continued growth in AI-driven innovation [1].

The S&P 500 and Nasdaq Composite built on recent momentum, with the former closing 0.78% higher and the latter up 0.61% in the prior session. These gains positioned the indices close to record levels, reflecting sustained demand for equities. However, the Dow faced headwinds, having closed over 500 points higher on Wednesday but reversing course as IBM’s earnings disappointment weighed on the index. The disparity between the indices highlighted the diverging performances of large-cap technology stocks and other sectors [1].

Market dynamics were further shaped by broader economic and geopolitical developments. A potential trade deal between the U.S. and European Union, which could limit tariffs to 15% instead of the previously threatened 30%, fueled optimism about reduced trade tensions. Investors also remained cautious about Donald Trump’s impending visit to the Federal Reserve, where debates over the central bank’s $2.5 billion headquarters renovation and its monetary policy decisions dominated discussions. The Fed has defended the overhaul as necessary for addressing inflation and aging infrastructure, while critics, including Trump, have labeled the spending excessive [1].

Meanwhile, Tesla Inc. faced scrutiny after its shares fell more than 6% in premarket trading. The electric vehicle manufacturer reported a 16% revenue decline and consecutive quarters of falling sales, dampening investor sentiment. CEO Elon Musk acknowledged the challenges during an earnings call, warning of potential "rough quarters" ahead. The company’s struggles contrasted with the broader market’s optimism, underscoring sector-specific risks in the current environment [1].

Cryptocurrency markets exhibited mixed performance, with Bitcoin hovering near $118,000 despite a generally bearish tone. The resilience of Bitcoin was attributed to lingering bullish sentiment from recent macroeconomic developments, though other cryptocurrencies underperformed [1].

The market’s trajectory was also influenced by the broader trade landscape. A U.S.-Japan trade agreement, finalized in late April, had already unlocked buying pressure, contributing to the upward trend in stocks. The continued strength in equities suggested that investors remained confident in the resilience of corporate earnings and the economy, despite lingering uncertainties around inflation and interest rates [1].

Source: [1] [Nasdaq, S&P 500 rise after Alphabet’s earnings beat] [https://coinmarketcap.com/community/articles/68823fddc7cdcb62e7f6ce6f/]