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• The Nasdaq Composite Index reached a record high due to robust corporate earnings and anticipation of Alphabet's results.
• The Dow Jones fell while investors sifted through a deluge of corporate earnings, with Vans parent VF Corp jumping 27% after reporting its first profit in two quarters.
• Investors are anticipating volatility with more corporate earnings, Middle East tensions, and the upcoming U.S. elections and Federal Reserve's policy-setting meeting.
• The Nasdaq's record high is a testament to the strength of the technology sector and the robust earnings of the "Magnificent Seven" companies.

The Nasdaq Composite Index, a key barometer of the performance of technology and growth companies, reached a record closing high on Tuesday. This surge was driven by robust corporate earnings and the anticipation of Alphabet's results, which were released after the market closed. Alphabet, one of the Magnificent Seven megacap technology stocks, reported quarterly revenue that exceeded estimates, contributing to the Nasdaq's rise of 145.56 points, or 0.78%, to 18,712.75. This surpassed the previous closing record set in July.

This week is the busiest for S&P 500 earnings in the quarter, with five of the Magnificent Seven companies reporting results. The performance of these companies is crucial in determining whether Wall Street can sustain the optimism around technology and artificial intelligence that has propelled indexes to record highs this year.

Bill Merz, head of Capital Markets Research for U.S. Bank's asset management group, commented on the market's reaction to these earnings. He noted that the market is digesting the idea of some degree of convergence in earnings growth between the high fliers - the Magnificent Seven that are very high in terms of market weighting - and the rest of the market.

Market Performance Amid Corporate Earnings

While the Nasdaq and S&P 500 rose, the Dow Jones Industrial Average fell 154.52 points, or 0.36%, to 42,233.05. Investors sifted through a deluge of corporate earnings. Notably, Vans parent VF Corp jumped 27% after the apparel company reported its first profit in two quarters. However, D.R. Horton fell 7.2% on Tuesday after the homebuilder forecast 2025 revenue below estimates, causing other homebuilders to lose ground and dragging the PHLX Housing index down 2.5%.

Ford slumped 8.4% a day after the automaker said it expected to hit the lower end of its annual profit forecast. Visa and restaurant chain Chipotle Mexican Grill posted earnings after the close. Meanwhile, the Labor Department's JOLTS survey showed job openings were at 7.44 million in September, compared with estimates of 8 million, a Reuters poll of economists showed. A separate report showed consumer confidence at 108.7 in October, above the estimated 99.5.

Among sectors, communication services, which includes Alphabet and Meta, was the top gainer, while utilities dropped 2.1%. Gains were limited as the benchmark U.S. 10-year Treasury yield touched 4.3% for the first time since early July.

Investor Anticipation and Market Volatility

Investors are anticipating a volatile few weeks with more corporate earnings, Middle East tensions, and the Nov. 5 U.S. elections followed by the Federal Reserve's policy-setting meeting. Declining issues outnumbered advancers by a 1.78-to-1 ratio on the NYSE. There were 176 new highs and 75 new lows on the NYSE. The S&P 500 posted 19 new 52-week highs and no new lows while the Nasdaq Composite recorded 93 new highs and 70 new lows. Volume on U.S. exchanges was 12.59 billion shares, compared with the 11.5 billion full-session average over the last 20 trading days.

In related news, investors are preparing for a full calendar of major releases on Wednesday, including bank and Big Tech earnings, a UK budget, a U.S. private payrolls report, and growth figures for the U.S. and several big European economies. Bitcoin is closing in on a record high, the European Union has decided to increase tariffs on China-built electric vehicles, and the latest polls reinforce that the U.S. presidential election is set to go down to the wire.

In Japan, the Nikkei hit a two-week high as tech shares tracked the Nasdaq's record high. The momentum across the company is extraordinary, according to Sundar Pichai, Alphabet's chief executive. He added that their commitment to innovation, as well as their long-term focus and investment in AI, are paying off with consumers and partners benefiting from their AI tools.