Nasdaq Rallies Ahead of Magnificent 7 Earnings: Stock Market Today
Earnings are the most important thing, and expectations are high. But interest rates are rising, and energy tensions aren't easing.
Technology stocks took off on Tuesday, and crude oil prices did the same. Investors, traders and speculators are looking forward to imminent earnings announcements from two of the Magnificent 7, even as the U.S. and Iran are escalating the war in the Middle East.
At the closing bell, the tech-heavy Nasdaq Composite was up 1.3% at 25,837, the broad-based S&P 500 had added 0.9% at 7,509, and the blue-chip Dow Jones Industrial Average was higher by 0.7% at 52,224.
Front-month West Texas Intermediate crude oil futures rose 2.7% to $84.68 per barrel, and the 2-year Treasury yield ticked up to 4.266% from 4.215% on Monday.
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The iShares Semiconductor ETF (SOXX, +5.5%) extended its gain on Monday into a full-blown rally on Tuesday, though the Roundhill Magnificent Seven ETF (MAGS, +0.01%) generated a more modest return.
"The market continues to look through the Middle East situation as transitory and is staying focused on strong earnings," Louis Navellier of Navellier & Associates observes. "The trend remains positive."
It's all about earnings
Google parent Alphabet (GOOGL, -1.4%) and electric vehicle maker Tesla (TSLA, +2.5%) are scheduled to report second-quarter earnings after the closing bell on Wednesday.
Much is riding on all of the Magnificent 7 stocks, Nvidia (NVDA, +2.0%) in particular. As FactSet analyst John Butters notes, the estimated year-over-year earnings growth rate for the group is 31.1%.
But there's a lot riding on earnings generally: The other 493 S&P 500 stocks are expected to post bottom-line growth of 22.8%, which would be their highest growth rate since the fourth quarter of 2021.
"In fact," Butters writes, "four of the five top contributors to earnings growth for the S&P 500 for Q2 2026 are not 'Magnificent 7' companies: Micron Technology (MU, +12.2%), Chevron (CVX, +0.7%), Exxon Mobil (XOM, +2.3%), and Broadcom (AVGO, +2.2%)."
Indeed, the leader of the AI revolution is the only Mag 7 stock that's also a top-five contributor to current earnings growth estimates. Nvidia posted fiscal 2027 first-quarter results in May and will report again on Wednesday, August 26.
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The energy stocks stand out, too, amid the bottleneck at the Strait of Hormuz. Chevron and Exxon Mobil are scheduled to report second-quarter results before the opening bell next Friday, July 31.
Micron and Broadcom revealed blowout results for their respective fiscal quarters in June. The semiconductor stocks are scheduled to report again in September.
3M looks good
3M (MMM) was No. 1 among the 30 Dow Jones stocks on Tuesday, rising as much as 10.7% to within $1.26 of its February 12 52-week high, after management reported expectations-beating results and raised its full-year guidance.
3M now sees earnings of $8.80 to $8.95 per share for 2026, up from a range of $8.50 to $8.70, with CEO Bill Brown citing "strong first-half performance and continued momentum."
The industrial stock generated a year-to-date total return of 0.3% through Monday vs 9.4% for the S&P 500, sagging in January after management shared lackluster initial guidance and trending lower through May.
Genuine Parts cuts some guidance
Genuine Parts (GPC, -2.7%) is one of the best stocks to buy for dependable dividend growth because of a 70-year history of raising its quarterly payout. Management of the automotive and industrial parts maker sustained that record in February with a 3.2% increase.
At the same time, though, the consumer discretionary stock said it was splitting into two publicly traded companies, "Global Automotive," which operates as the familiar NAPA retail front, and "Global Industrial," which works under the Motion banner.
The separation is costing more than management forecast, so Genuine Parts updated elements of its full-year forecast, most notably GAAP EPS. That estimate was revised from $6.10 to $6.60 to $5.90 to $6.40.
Management reaffirmed its adjusted EPS guidance range, $7.50 to $8, as well as its 3% to 5% revenue growth rate forecast. Still, that updated element shook the market.
It appears management understood the gravity of its decision and conducted a thorough review: "The company considered its recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook, geopolitical conflicts and the potential impact on results in updating its outlook."
Genuine Parts hasn't defined a post-separation dividend policy, though details will likely be forthcoming following the forecast completion of the separation in the first quarter of 2027.
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