US equities rally as investors digest earnings

US equities are sharply surging on Tuesday as investors digest another batch of corporate results and earnings. The S&P 500 index gained 2.5%, while the Dow Jones Industrial Average jumped 675 points, or roughly 2.2%. The tech-heavy Nasdaq Composite climbed 2.8%.

Johnson & Johnson reported earnings for the period that beat analysts’ estimates but cut its full-year sales and profit outlook, pointing to the impact of a stronger US dollar. Shares were little changed on Tuesday.

Meanwhile, IBM (IBM) stock tumbled 6.6% despite earnings beat after the software giant trimmed its forecasts for free cash flow this year, citing currency headwinds and loss of business in Russia.

Of the 35 S&P 500 companies (comprising 10% of the index) that reported second quarter results as of July 15, 43% of companies beat on sales and earnings per share – weaker than the historical post-week 1 average of 47% and the weakest share since the first quarter of 2020.