Market Snapshot: Dow strives for 12th day of gains as Microsoft and Alphabet earnings loom

What’s driving markets

The Dow Jones Industrial Average is on an 11-session winning streak, its best run in more than six years, as hopes build that the Federal Reserve’s remaining interest rate hikes this year will not cause a recession as inflation cools.

Whether the Dow can make it an even dozen days of gains and extend its rally even further to fresh 15-month highs will likely depend on the next few days containing corporate earnings reports and Fed comments.

Dow components 3M
MMM,
-0.06%
and Verizon Communications Inc.
VZ,
+0.30%
both reported results before the bell. So did big name companies like General Electric
GE,
-0.07%
and General Motors
GM,
+1.95%.

After the bell, come Microsoft
MSFT,
+0.39%
and Visa
V,
+0.62%,
with non-Dow member Alphabet
GOOG,
+1.30%
also a highlight. Coca-Cola
KO,
+0.03%
and Boeing
BA,
+1.92%
are among those Dow members presenting their numbers on Wednesday.

Wednesday also sees the Fed’s latest monetary policy decision. The market is certain the central bank will increase its policy interest rate by another 25 basis points to a range of 5.25% to 5.50%.

But investors are less sure of whether that will be the last hike of the current cycle, so the Fed’s accompanying statement and what Chair Jerome Powell says at his press conference will be the main drivers of bonds, equities and forex around the event.

And that may lead to disappointment, warned Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “[W]hat Fed officials will also do is to remind investors that the tightening cycle is probably not over and that there will probably be another rate hike on the U.S. horizon. So yes, there is a great chance that the Fed will spoil your mood if you are among those thinking that this week’s rate hike will be the last for this tightening cycle in the U.S..”

Meanwhile, helping underpin sentiment on Tuesday was a rebound in Chinese stocks, notably property developers after Beijing signaled support for the heavily-indebted sector.

U.S. economic updates set for release on Tuesday include the S&P Case-Shiller home price index for May, due at 9 a.m. Eastern, and July consumer confidence at 10 a.m.

Companies in focus

• General Electric Co.
  GE,
  -0.07%
  shares up more than 4% before the bell and approaching a nearly five-year high after second quarter results from the aerospace and renewable energy company that topped expectation. The company reported net income of $946 million, or 86 cents per share, from a loss of $1.25 billion, or $1.13 a share one year ago, while free cash flow and revenue also beat estimates.

• Verizon Communications Inc.
  VZ,
  +0.30%
   shares are up more than 2% in the premarket after the telecommunications company topped profit expectations in its latest earnings but came just below revenue expectations. The company reported $1.21 earnings per share, above FactSet consensus for $1.17 earnings per share.

• General Motors Co.
  GM,
  +1.95%
  shares are unchanged after the car maker delivered better than expected second quarter earnings and raised its guidance. The company had adjusted earnings per share of $1.91, topping the $1.86 consensus according to FactSet.  

• 3M Co.
  MMM,
  -0.06%
  shares are more than 2% higher in the premarket Tuesday after results showing the company booked a loss in connection with a litigation settlement over “forever chemicals.” But taking away the one-time charge, the company still topped adjusted profit expectations and raised its full-year outlook.

• Spotify Technology
  SPOT,
  -4.65%
  shares tumbled about 10% in premarket trading Tuesday after the streaming giant easily surpassed subscriber-growth expectations for its latest quarter but failed to sport upside on its key financials.