Market Continues Rally Into Big Tech Earnings

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Alex Partida

Oct 25th 2022  .  3 min read

The Stock Market Continues to Rally Into Big Earnings

The stock market floated around the psychological level of 3,800 on the S&P 500 futures all night, indicating this level would serve as support during the cash session. 

In the previous Simpler News article, “Big Tech Earnings Push Indices Higher,” we stated that ” If the price can remain above 3,800, a move higher toward the 50-day simple moving average (SMA) at 3,890 becomes more likely. “

Utilizing this psychological level as a roadmap and a moving average, such as the 50-day SMA, can help identify targets. Significant levels will often act as a floor and push markets higher. 

Market races higher at the open 

When the opening bell sounded, the S&P 500 futures quickly defended 3800 and found support. From this point forward, the town was set. Transparently, buying had flooded the market, keeping the index above the line in the sand and pushing towards the target.

Along the way, the market seamlessly put in higher highs. On an intense trend day, the Volume Weighted Average Price (VWAP) will often support the trend. In today’s case, the indexes only relied on holding VWAP early in the session. The fact that the indices never tested VWAP signified the move’s strength, as the buying pressure was constant throughout the day.

Earnings bring the market lower after cash session. 

After the closing bell, both Google and Microsoft reported their earnings. Another thing to note about big names reporting such as these is that they can dramatically move the market, and today they did just that. 

Microsoft released their numbers as soon as the closing bell sounded, and they did not disappoint. They reported earnings per share (EPS) of $2.35, beating their expected $2.29. In addition to beating EPS, Microsoft also reported higher revenue than the expected $49.56B. The revenue for Microsoft in quarter three came in at $50.12B. The after-hours boost in stock price was subsuquently brought down after Google’s earnings report. 

Google was the next tech giant in line to report, and they did not live up to their expectations. Google missed both its EPS and Revenue. The earnings per share came in at $1.06, below the expected $1.25. Revenue also came in lower than the expected $58.18B, and data showed $57.27B.

On top of missing both EPS and Rev, Google was down on advertisement revenue. It is safe to say that the market did not like the numbers. Once the data was digested, the Nasdaq and other markets priced in this bad news and moved lower. 

Stock market closes positive.

The Nasdaq and the S&P 500 were positive to close the session. The S&P 500 closed up 1.59%, gaining 60 points, while the Nasdaq closed up 2.18%, a gain of 239 points. The Dow followed, closing up 1.06%, adding 332 points.

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