Stock Market Update
Stocks are having an interesting run, and there’s a lot to unpack as we head into the next trading day. So, what’s been happening? The S&P 500’s relative strength index (RSI) is sitting at about 68—though 70 is considered “overbought.” This means, well, that the index might be rising quickly but doesn’t necessarily predict a drop just yet. Rob Sechan from NewEdge Wealth noted on “Closing Bell” that around half of the S&P 500 is above its 50-day moving average, suggesting that a shift in investor sentiment could change this dynamic.
In terms of new highs, both the Nasdaq and Dow saw significant gains today. Interestingly, the Nasdaq 100 and its RSI are above 70, indicating rapid ascension, while the Dow’s RSI is at 66.65. The industrials, communications services, and tech sectors all reached new peaks, yet the industrial products sector has an RSI of only 55, with communications sitting at 67, and tech stocks at a lofty 74.5—definitely in overbought territory.
Now to look at some specific sectors: the S&P Real Estate sector has jumped 9.6% since November, and the Energy sector is up 8.6% over the same period. On the flip side, Materials and Consumer Staples are both down about 7.7% from their recent highs.
Big Tech Earnings
Looking ahead to Thursday, CNBC will keep an eye on Meta, Microsoft, and Alphabet following their earnings announcements. Meta managed to exceed expectations but also revealed plans for a hefty $16 billion in taxes and projected their fourth-quarter sales between $56 billion and $59 billion—a bit better than what experts anticipated. Still, the stock took a hit, falling about 7% after hours but remains just under 6% from its August high.
Microsoft reported impressive growth, particularly in its Azure cloud services, but even after beating expectations, it saw a dip of about 4% in extended trading. Its stock is down less than 3% from its July peak. Alphabet also beat estimates and announced an increase in capital expenses, aiming up to $93 billion this year, which led to a more than 6% rise in shares after hours.
Amazon and Apple’s Upcoming Reports
Amazon hasn’t moved much since its last quarterly update, remaining flat over the last three months but still showing a 5% increase since February. Meanwhile, Apple has been climbing—up 28% since its last report and hitting an all-time high recently, with an 8% increase just this year.
Tariff Insights
In other news, Caterpillar has adjusted its tariff forecast to between $1.6 billion and $1.75 billion for the year, up from previous estimates of $1.3 billion to $1.5 billion. Despite this, stocks managed to rally significantly, marking the best day since 2009. Caterpillar is now up over 61% year-to-date and has gained more than 36% in recent months. However, Brinker International noted that rising tariffs are boosting commodity prices, prompting the company to increase prices slightly, which has contributed to its stock falling about 7% on Wednesday.
This brings us to tomorrow. We’ll be looking for revenue updates from Estée Lauder, which previously warned that tariffs could hit its fiscal 2026 profitability by $100 million. Despite that, its stock has risen more than 8% since then and nearly 100% since earlier in April. Ulta Beauty and Elf Beauty also saw solid gains recently, demonstrating some resilience amidst the complexities of tariffs and market fluctuations.
