Article published at 10:30 a.m. CT
Key Takeaways:
- Earnings season tests investors sentiment
- WTI Crude prices edge higher amid renewed Middle East conflict
- Blackrock is holding $15.3 trillion in assets
As earnings season gains steam, expect a certain level of heightened volatility in the markets as investors digest the results — no matter how strong or weak they might be – and process the forward guidance.
In some cases, an impressive quarterly report might include a soft outlook, which could lead to a share pullback. Or, as we’ve seen with some stocks that have had amazing runs and even positive forward guidance, investors still might question whether that outsized growth is sustainable.
Today’s action on shares of Johnson & Johnson could be considered an example. The healthcare giant beat Wall Street’s revenue and earnings expectations and upped its full-year outlook on both sales and profits, but shares were heading lower by 2.5% in early trading. The stock is up 64% in the last year, which might cause some investors to take a pause and profits.
Elsewhere, WTI Crude Oil prices are swinging 1.1% higher again, stoked by the intensifying discord between the U.S. and Iran over the Strait of Hormuz, which appears to put the two sides back into full-scale warring positions. The U.S. military foisted a naval blockade on Iranian ports and launched another set of airstrikes, which Iran responded to with its own series of attacks.
Although still much lower than late May levels, WTI Crude prices are pushing into the $80 range after yesterday’s higher close at $78.11 per barrel. This puts crude prices higher by nearly 20% since the onset of the Iran war.
Overall, the three major indices were tiptoeing to the upside in early trading with the Nasdaq Composite up by 0.43%, the S&P 500 Index rising by 0.26% and the Dow Jones Industrial Average edging higher by 0.24%.
Tech stocks are taking a limelight in the markets again today after ASML Holdings, the Dutch-based firm that makes the machines that make the chips, turned in record results and boosted its sales outlook for the second time. The read on that is that AI spending on chip-making, basically the picks and shovels of the industry, is expected to remain somewhat resilient.
Morgan Stanley joined the bevy of big banks posting exceptional results that included record revenues, driven by record equities trading and strong investment banking results, thanks to the initial public offerings such as SpaceX’s. Morgan Stanley did not offer an outlook in its earnings report, but may offer one during its conference call. Stay tuned. Shares were trading higher in pre-market trading, but lost that momentum to turn lower by about 1.9%.
Shares of Blackrock were higher by 6.6% in early trading after the world’s largest asset manager delivered sales and earnings results that handily outpaced Wall Street’s expectations. Chief Executive Larry Fink said the client demand for investment management firm has never been greater during the incredible growth in the capital markets, noting that Blackrock is sitting on $15.3 trillion in assets. Digest that for a moment.
Elsewhere, shares of PayPal rocked some 18% higher in early trading after Reuters reported there is an acquisition play in place. Stripe, the payments firm, and private equity group Advent International are said to have offered to purchase PayPal for $53 billion, pricing it at $60.50 per share. PayPal has not responded, according to reports.
IBM shares are seeing a modest recovery in early trading, a day after its historic 25% collapse, eclipsing its worst day on Black Monday nearly 40 years ago and, according to reports, its worst day since 1986 in its 115-year history. Its fall – fueled by an unexpected earnings warning – pulled down the Dow on a day when the indices ended higher. To be sure, the Dow was among them, nudging up just 0.02%. The S&P 500 finished higher by 0.39% and the Nasdaq added 0.90%.
How bad was IBM’s record-breaking, one-day descent? It wiped out a staggering $69 billion in market capitalization – roughly the gross domestic product of Costa Rica.
Happy trading!
2026 Cboe Exchange, Inc. All rights reserved.
The information provided is for general education and information purposes only. No statement provided should be construed as a recommendation to buy or sell a security, future, financial instrument, investment fund, or other investment product (collectively, a “financial product”), or to provide investment advice.
