Tech stocks are driving today’s stock market rally. As of 3:52 PM ET, the tech-heavy the Nasdaq Composite Index is up 0.81% driven by a surge in tech stocks. CNBC reported that the Nasdaq rose to an all-time high this morning after Texas Instruments’ and Teradyne’s earnings lifted chipmaker stocks.
Texas Instruments and Teradyne earnings
Yesterday after the market closed, semiconductor companies Texas Instruments (TXN) and Teradyne (TER) reported their second-quarter earnings results. TXN’s revenue of $3.7 billion in Q2 beat analysts’ estimate of $3.6 billion. However, it declined 9.8% year-over-year. Its Q2 EPS of $1.36 also beat analysts’ estimate of $1.22.
Teradyne’s revenue of $564.2 million beat analysts’ estimate of $536.7 million. Texas Instruments stock is up 7.3% while Teradyne stock has gained 18.2% today. The tech-heavy Nasdaq surged today, driven this rise in semiconductor stocks.
Semiconductor index drove the surge in Nasdaq
Chipmaker stocks had a roller coaster ride in 2019 after US-China trade talks escalated in May. The semiconductor sector was expected to get hit the most. Trade tensions have been escalating, taking a toll on the sector’s performance. However, Texas Instruments and Teradyne’s strong results restored investors’ faith in semiconductor stocks.
The SPDR S&P Semiconductor ETF tracks the S&P Semiconductor Index. The ETF is up 3.0% today and has gained 45.6% year-to-date. The index’s top holdings are also up. Microchip Technolgy (MCHP) is up 4.2%, Micron Technology (MU) is up 2.1%, and Applied Materials (AMAT) is up 2.3%.
Trade tensions and the stock market
The stock market’s surge today was also driven by another report from CNBC. The article explains that US and Chinese negotiators will meet for face-to-face talks next week.
Other stocks driving the Nasdaq today
Netflix shares are up 4.0%, mostly because of the company’s launch today of a lower-priced plan to widen its customer base in India. Telecom company AT&T (T) shares are up 3.4% after earnings met Wall Street estimates. CNBC reported that the stock rose after the company reported net phone subscriber growth that beat estimates. It also increased its 2019 free flow cash guidance.
Tesla stock is up 1.9% today before it releases its second-quarter earnings today after markets close. The company is expected to report a 60% year-over-year increase in revenue to $6.4 billion. However, it could report a loss of $0.36 per share in the second quarter.
Facebook (FB), Ford Motors (F), and PayPal (PYPL) are up 0.98%, 1.3% and 0.74%, respectively. These companies are slated to report their earnings after the closing bell today as well. These stocks also drove the Nasdaq surge.
How earnings season is going
Early expectations suggested that the market was heading toward an earnings recession this quarter. Yet earnings season has shown mixed results so far. The S&P 500 Index is up 0.44% today. Meanwhile, the Dow Jones Industrial Average is down 0.33%.
Stay tuned to see how the rest of earnings season turns out for the market.