Stock futures traded little changed Tuesday evening as investors eyed a slew of stronger-than-expected earnings results from closely watched technology companies. Both the Dow and S&P 500 had set record closing and intraday highs during Tuesday’s session.
Google’s parent-company Alphabet (GOOG, GOOGL) saw shares tick up in late trading after posting third-quarter revenues and earnings that topped consensus estimates, fueled by a further rise in online advertising spending especially among retailers on Google Search. Microsoft (MSFT) also posted quarterly results that exceeded estimates, aided by another surge in the company’s closely watched cloud computing business segment.
Outside of the mega-cap technology companies, a number of other corporations also posted resilient earnings results. Twitter (TWTR) shares gained in late trading after posting third-quarter sales that were about in-line with expectations, while Wall Street had braced for the company to see similar negative impacts from Apple’s iOS privacy update as peer social media company Snap (SNAP) had reported for the same quarter.
Chipmaker Advanced Micro Devices (AMD) also delivered quarterly earnings that exceeded estimates and boosted its full-year forecast. The company noted that supply chain constraints were partially inhibiting its ability to meet demand to provide PC and video-game console chips, though CEO Lisa Su added during AMD’s earnings call that she believed the current supply-side challenges would improve next year.
The latest batch of earnings results helped affirm to Wall Street that many companies have been able to work through rising price pressures to continue delivering estimates-topping sales and profits. Though many pundits have suggested inflationary pressures and supply chain disruptions could last for longer than previously anticipated, few have suggested the impacts will be insurmountable to most major companies.
“What we’ve got from these supply chain issues is a near-term earnings problem. I think it’s something we do have to monitor in the first half of the year,” Lori Calvasina, RBC Capital Markets chief equity strategist, told Yahoo Finance on Tuesday. “Earnings growth is only tracking at 4% or 6% in the first two quarters of next year. So companies do have to keep managing through for the market to continue to move up.”
“But the reality is that the underlying economic backdrop simply is not stagnant,” she added. “I really just don’t buy into that stagflation argument at all.”
And on the demand side, American consumers have shown few signs of slowing their spending in the face of rising inflation. The Conference Board said Tuesday that the percentage of consumers planning to purchase homes, automobiles and major appliances increased this month, even as short-term inflation expectations surged to a 13-year high.
“The consumer’s got tons of cash right now so they don’t mind the fact that they’re raising prices on us – and that’s the story right now,” Ryan Payne, TK, told Yahoo Finance Live on Tuesday. “That’s why profits are going up. You’ve got a very price insensitive consumer, because we’ve got lots of cash. Wages are going up. And companies can keep essentially raising their prices as their costs go up. And that’s why we’re kind of in this Goldilocks economy right now— another reason why the market’s going to continue to climb higher here.”
6:04 p.m. ET: Stock futures open little changed
Here’s where markets were trading as the overnight session kicked off Tuesday evening:
S&P 500 futures (ES=F): -0.5 points (-0.01%), to 4,564.75
Dow futures (YM=F): -8 points (-0.02%), to 35,636.00
Nasdaq futures (NQ=F): -4.75 points (-0.03%) to 15,540.25
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter
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