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The markets will look to quarterly earnings results after today’s close from Apple (AAPL) and Amazon.com (AMZN) for market direction. Both stocks have rallied sharply recently, which is a significant reason why the S&P 500 Stock Index ($SPX) (SPY) is up more than +17% this year. However, with both stocks trading at elevated multiples and facing headwinds to their core businesses, there will be pressure for today’s earnings results to justify their recent sharp rallies.
Interest rate-sensitive technology stocks have come under pressure this week from a surge in bond yields as the 10-year T-note yield rose to a 9-month high today. If the recent rally in technology stocks is to get back on track, Apple, with its 48% gain this year and its market cap of more than $3 trillion, will need to show impressive quarterly earnings results today as the company accounts for nearly 8% of the S&P 500 Index, giving it enormous sway over the index
