EBC Markets Briefing | ​Wall St resilient; Disney concerns jeopardized shares

Wall St opened the new month higher on Monday, with focus shifting to Nvidia. According to WSJ, the chipmaker's plans to pour $100 billion into OpenAI had stalled on doubts over potential benefits.

Deutsche Bank said earnings growth is on track to be the strongest in four years. So far, about one-third of S&P 500 companies have reported, and roughly 78% of them beat expectations, per FactSet.

Hedging against declines in semiconductor stocks picked up ahead of earnings releases from some of the biggest tech names, including Apple, Tesla and Meta Platforms.

Blackrock still prefers tech broadly as earnings growth looks healthy and poised to broaden, both within the US and globally. The Magnificent Seven earnings are expected to rise 20% year over year, according to Bloomberg.

Also the bank said mega forces and lower rates are helping boost cyclical sectors linked to stronger growth, which makes the case for narrowing gap between TMT and other sectors.

Goldman Sachs Research forecasts last month that the S&P 500 to produce a 12% total return in 2026. They expect EPS to increase 12% in 2026 and 10% the following year.

The S&P 500 broadly traded above 50 SMA, so any dip below the support could present an opportunity to buy the dip. A breach of 7,000 is likely if upcoming results fare well.

Asset recap

As of market close on 2 February, among EBC products, Caterpillar shares led gains as record earnings and high-profile AI infrastructure deals signal a new era for the industrial giant.

Disney reported quarterly revenue and earnings that topped analyst expectations, lifted by its theme parks, resorts and cruises segment. But executives warned that growth in the current quarter would be muted.

The US and India have reached a trade deal and will immediately move to lower tariffs on each other's goods, Trump announced. It came a week after India closed a FTA with the EU.

Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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