Nvidia, Apple among other tech stocks saw strong investor interest on Tuesday, as broader markets rebounded from losses clocked in the previous trading session. The tech-heavy Nasdaq index surged over 2%, or more than 300 points. Meanwhile, the NYSE FANG+ Index jumped over 370 points.
While expectations around better-than-estimated Q1 results, quite evidently played its part in the overall market rally, the recent comments by Treasury Secretary Scott Bessent played a much bigger part in the market surge. As per sources cited in a report by Bloomberg, Bessent told a group of investors that a trade war with China is not sustainable, concurrently hinting at a potential deal between China and the US.
Interestingly in the last 5 trading sessions, the Dow Jones Industrial Average has plummeted by nearly 4% whereas the Hang Seng index has managed to stay in the green territory. Global brokerage firm Jefferies even mentioned in its latest report that the US might be losing its leverage against China. So the recent rumours around a prospective trade deal between the US and China might come as positive news for some.
Hopes Remain High for Q1
Hopes remain quite high for this earnings season. According to Factset Insight, only 12% of S&P 500 firms have reported their earnings for this quarter. However, more than 70% of companies (which have announced Q1 results) have reported EPS above estimates.
On average, earnings have exceeded forecasts by 6.1%. If the final growth rate reaches 7.2% for the quarter, it would mark the seventh straight quarter of year-over-year earnings growth for the S&P 500.
However, external pressure might continue to haunt the bottom lines of major firms as there is something both investors and corporations hate alike: uncertainty.
So far this year, investor sentiment has largely remained under pressure with the S&P 500 index dropping over 10% or nearly 600 points.
