US stocks impressively rally ahead of key earnings

Wall Street’s rally continued apace on Tuesday, with the Dow Jones Industrial Average rising to a 52-week high. Microsoft soared on news about its AI-powered Office tools and its AI alliance with Meta Platforms.

META stock rose slightly, while AI chip leader Nvidia kept climbing. Financials continued to rally on bank earnings. Less-than-truckload trucking firm ArcBest gapped out of a base, drug giants Eli Lilly and Novartis flashed buy signals, as did Skechers and building materials firm Atkore.

Earnings were reported by J.B. Hunt Transport Services, Interactive Brokers, and advertising giant Omnicom Group. JBHT stock rose modestly overnight even though J.B. Hunt earnings and revenue fell short. IBKR stock declined solidly in late trading after Interactive Brokers earnings and revenue missed.

Shares climbed nearly 3% to 86.27 on Tuesday. The official buy point is 90.19, but investors can use a move above resistance around 87 as an entry.

OMC stock tumbled after Omnicom earnings were in line and revenue slightly missed. Shares edged down 0.3% to 97.92 on Tuesday, holding in a buy zone from a 94.77 cup-with-handle buy point. ASML reports very early Wednesday morning, with shares holding just above a buy point.

Halliburton and Baker Hughes (BKR) also report, with oil services firms ramping in recent weeks. Goldman Sachs is due before the open, with shares bouncing back but below the 200-day. Carvana will report second-quarter results early Wednesday, moving up results Tuesday night from Aug. 3. Tesla stock and Netflix will be in focus Wednesday night.

Dow Jones futures were flat vs. fair value, while S&P 500 futures and Nasdaq 100 futures lost a fraction. Overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session. Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.

Microsoft AI prices are expected to be bullish, with Microsoft 365 Copilot costing $30 a month for enterprise customers on top of their existing subscriptions. Microsoft will use Meta’s new AI large language model, Llama 2, via its Azure cloud-computing service. Microsoft stock popped 4% to 359.49, clearing a four-week consolidation to a fresh record high.

Meta stock edged up 0.5% to 312.05, right around record highs. While Meta won’t directly make money on the Microsoft deal, it will get Llama 2 before users and developers. Nvidia stock climbed 2.2% to 474.94, a record close, on expectations that Nvidia chips will be powering the AI boom from Microsoft and others. Microsoft earnings are due on July 24, with Meta the next day and Amazon.com the day after that. Stocks in buy zones include ARCB stock leaping 4.8% to 100.59, NVS stock popping 4.6% to 103.47, and Skechers stock stepping up 1.9% to 53.90.