U.S. stocks rose on Tuesday on investors’ renewed enthusiasm for expected earnings reports from megacap technology companies Alphabet (GOOGL.O) and Microsoft (MSFT.O) amid signs of economic resilience.
A survey showed consumer confidence increased to a two-year high in July, amid continued optimism about the labor market despite worries about a recession.
U.S. tech giants are expected to signal an end to a nearly year-long slowdown in their cloud businesses as technology spending and digital ads are likely to pick up.
Investor fascination with artificial intelligence is a positive influence for megacap tech firms, said Steve Sosnick, chief strategist at Interactive Brokers. “When you have this much enthusiasm for a specific investing theme, you don’t need much of a reason for markets to move. It’s inertia.”
With the U.S. central bank on track for another 25-basis point interest rate hike on Wednesday, policymakers face a choice over how much weight to put on recent economic data.