NEW YORK - Next week’s earnings reports from some of the market’s biggest technology and growth companies could prove an important test for the U.S. stock rally, which has flagged as expectations for interest cuts fade.
Additionally, the monthslong rally in stocks has made the index expensive relative to history at a time when rising Treasury yields are pressuring equity valuations. Disappointing earnings from the market’s heavyweights could give investors less reason to hold stocks. The performance of megacaps’ shares has diverged in 2024, after last year’s epic run. Tesla, which reports results on Tuesday, has seen its shares tumble about 40% in 2024 amid concerns about its electric vehicle business.
Six of the seven, excluding Tesla, are expected to post collective earnings growth of 42.1% in the first quarter, UBS strategists said on April 8.