Stocks Trade Mixed as Focus Swings to Tech Results: Markets Wrap

(Bloomberg) — Stocks traded mixed as investors’ focus swung from US politics to tech-sector earnings with heavyweights Tesla Inc. and Alphabet Inc. reporting later Tuesday.

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Futures on the S&P 500 were little changed as NXP Semiconductors NV missed analyst estimates, while General Electric Co. climbed in premarket trading after reporting an increase in second-quarter profit. In Europe, the Stoxx 600 Index was 0.6% higher as German software firm SAP SE rose the most since January and Swiss computer accessories maker Logitech International SA jumped.

Companies representing 29% of the S&P 500’s market value are due to report this week and Tesla and Alphabet are the first of the so-called Magnificent Seven tech giants to post earnings this quarter. With valuations among technology firms still high after last week’s retreat, investors are looking for more evidence that their businesses are on track and the euphoria around artificial intelligence is justified.

Analysts are keen for details of Tesla’s robotaxi service, while Google parent Alphabet is expected to see a sales boost from its cloud unit.

About 16% of the companies in the S&P 500 have reported so far, according to data compiled by Bloomberg Intelligence, and most have beaten earnings-per-share expectations. Analysts are predicting that index earnings grew 9% in the second quarter from a year earlier.

At the same time, US election developments remain front and center, with Kamala Harris now having more than enough pledged delegates to clinch the Democratic presidential nomination. On the data front, US readings on the economy are due later in the week as well as the Federal Reserve’s preferred inflation gauge.

“The earnings season is now shifting gear,” said Andrea Tueni, head of sales trading at Saxo Banque France. “This will be this week’s focus before inflation on Friday. I don’t see a repricing of the ‘Trump trade’ taking place just yet.”

The dollar traded steady while yields on US Treasuries ticked lower.

Yen Gains

In Asia, the yen strengthened against the dollar as traders look set to trim their carry positions during the summer holiday season. Some Bank of Japan officials are open to raising rates at the July meeting while others see weakness in consumer spending complicating their decision, according to people familiar with the matter.

In commodities, oil was steady near a six-week low.

Corporate Highlights:

Spotify Technology SA, the Swedish audio-streaming giant, reported second-quarter subscriber growth that exceeded analysts’ projections after rolling out price increases.
LVMH, the world’s largest luxury group, is seen reporting an increase in second-quarter sales when it posts results after markets close on Tuesday.
Porsche shares fell the most on record after the company lowered its outlook for the year, saying a shortage of aluminum parts could cause it to stop production of some models, adding to pressure from slowing sales in China.
Cybersecurity startup Wiz Inc. has turned down a takeover bid of as much as $23 billion from Alphabet Inc., sticking instead with a plan for an initial public offering.
Banco Sabadell SA’s profit jumped in the second quarter, bolstering Chief Executive Officer Cesar Gonzalez-Bueno’s attempt to prevent a takeover by rival BBVA SA.
Toyota Motor Corp. will buy back ¥806.8 billion ($5.2 billion) worth of its stock from major Japanese banks and insurers as part of a broader push to unwind strategic shareholdings with financial partners.