Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
S&P 500 Stretches Toward 4000 as Earnings Come Into Focus

S&P 500 Stretches Toward 4000 as Earnings Come Into Focus

Brendan Fagan, Contributor


What's on this page

S&P 500, ECB, Netflix, Tesla, Snap, AT&T, FOMC - Talking Points

  • S&P 500 breaks resistance at 3980, bringing 4000 firmly into view
  • ECB raises rates by 50 basis points in first hike since 2011
  • Tesla reports top and bottom line beats, shares soar
Equities Forecast
Equities Forecast
Recommended by Brendan Fagan
Get Your Free Equities Forecast
Get My Guide

Equities pushed higher on Thursday as better-than-expected corporate earnings continue to bolster sentiment. While economic data continues to worry many, earnings this week from tech heavyweights Netflix and Tesla have eased fears over an impending crunch on corporate profits. While the bar was extremely low for Netflix, the beats relative to what the street expected saw shares break back through $200. Tesla beat top and bottom line forecasts after the closing bell on Wednesday, with shares gaining by more than 9% during Thursday’s session. The recent rally has seen the S&P 500 bounce roughly 9.6% off the June lows, as tech outperformance (a familiar theme) continues to pull the market higher.

While Tesla and Netflix soared after earnings, numerous S&P 500 names have come under serious pressure. AT&T tumbled roughly 10% after slashing free cash flow guidance for the year, while airline companies American and United both sold off on disappointing results. With nearly 20% of the S&P 500 having reported quarterly results, just 71% have recorded earnings beats. This sits below the FactSet 5-year average of roughly 78%. Eyes now turn to Snapchat, which is set to release results after the closing bell on Thursday.

Stocks had been initially lower in premarket trade, as the European Central Bank (ECB) announced its first rate hike in 11 years. The ECB opted for a larger-than-expected hike of 50 basis points, while most economists forecasted just a 0.25% increase. ECB President Christine Lagarde had indicated at the last meeting of the Governing Council's intention to raise by 0.25% in July, but surging inflation caused the central bank to abandon its forward guidance. For more on this morning’s ECB meeting, please click here.

S&P 500 1 Hour Chart

Chart created with TradingView

S&P 500 futures (ES) roared into life after the opening bell in New York, with markets initially trading lower in the premarket following this morning’s ECB meeting. The momentum has been strong of late, with 3720 turning out to be a launching pad for the index. The S&P 500, along with the broader market in general, has been able to shrug off a deluge of headwinds recently during this relentless move higher.

Thanks to the recent rally, we appear to be approaching a key inflection point around the 4000 psychological threshold. The test of that area coincides with a major risk event, with the July FOMC meeting next Wednesday. While bets for 100 bps have certainly cooled, it surely cannot be ruled out. Central banks have moved lately to frontload hikes, as evidenced by the ECB this morning or the Bank of Canada doing 100 bps just last week.

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

--- Written by Brendan Fagan

To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.