Nasdaq Index, Dow Jones, S&P 500 News: Tech Sector Surge Fuels Bullish Trend with Focus on Tesla (TSLA)

Key Points

• Netflix (NFLX) drives tech sector, boosting market optimism.
• Corporate earnings mixed, market volatility possible.
• Tesla (TSLA) earnings crucial for Thursday’s market direction.

Market’s Opening Surge

The major U.S. stock indexes opened higher on Wednesday, continuing their pre-market strength. This rise is primarily fueled by a substantial overnight increase in Netflix shares, following its record-high subscriber count report for the fourth quarter. These gains in the streaming giant’s shares are contributing significantly to the broader market, particularly propelling the S&P 500 to new heights and confirming the onset of a bull market.

In the cash market at 14:34 GMT, the Dow Jones Industrial Average is trading 38021.97, up 116.52 or +0.31%. The S&P 500 Index is at 4890.11, up 25.51 or +0.52% and the Nasdaq-100 Index is trading 15544.23, up 118.29 or +0.77%.

Netflix Leads With Subscriber Growth

Netflix’s shares soared over 10% in premarket trading, driven by the announcement of adding more than 13 million subscribers in the last quarter. This surge in subscriber count has taken the total to a record 260.8 million, with revenue and earnings guidance surpassing analyst expectations. Netflix’s performance sets a positive early tone for the market, building upon the momentum gained by mega-cap tech stocks throughout 2024.

Mixed Early Earnings Reports

In contrast to Netflix, AT&T and Dupont De Nemours saw declines in their stock values, with AT&T slipping over 2% and Dupont tumbling 11% due to weaker-than-expected earnings and guidance. EBay, on the other hand, reported a rise of over 3% following its announcement to reduce its workforce, a decision aimed at aligning expenses with business growth. Abbott Laboratories also experienced a 2% drop despite reporting earnings in line with forecasts.

Earnings Outlook

Traders’ focus remains on earnings reports, with significant announcements expected from Tesla, Las Vegas Sands, and IBM. The anticipation around these reports, especially Tesla’s expected earnings, is high, with over 70% of S&P 500 companies so far surpassing Wall Street expectations.

Treasury Yields and Economic Data Watch

U.S. Treasury yields were lower, as the market braces for pivotal economic data releases later this week, including the fourth-quarter GDP growth figure and the personal consumption expenditures price index. These reports will be crucial in shaping the Federal Reserve’s interest rate decisions, which are pivotal for the market and economic outlook in the short term.

Short-Term Forecast

In the short term, U.S. stock markets are expected to continue their bullish trend on Wednesday, primarily driven by strong tech sector performances, notably Netflix.

However, investors should stay alert to potential turbulence ahead, given mixed corporate earnings and crucial economic data that could sway market direction and influence Federal Reserve decisions.

Tesla’s earning results after the close could set the tone for Thursday.

Technical Analysis