Tech stocks lead US rebound, but still lag behind global names

We’re about a third of the way into earnings season and results have been fairly solid

February 4, 2025 03:30 pm

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Bolstered by Big Tech, US equities were on the road to recovery after yesterday’s tariff-fueled rout.

The Magnificent Seven stocks were in the green midway through the session, with Meta and Alphabet as the big winners. Meta is now riding a record 12-session winning streak while Alphabet saw positive momentum ahead of the company’s earnings release later today.

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We’re about a third of the way into earnings season and results have been fairly solid.

As of last Friday, when 36% of S&P 500 companies had reported, 77% had beat analysts’ earnings expectations for Q4 2024. This is in line with last year and slightly ahead of the 10-year average. 63% of companies so far have beat on revenue expectations, which is a bit below the 5-year and 10-year averages.

Today’s rebound aside, US Big Tech is still lagging behind big foreign names. NVDA, down almost 15% year to date, is the worst-performing Big Tech stock across every region. Alibaba (+21% in 2025) is the best.

Other top performers so far this year include Hong-Kong-listed Xiaomi (+16%) and Seoul-listed Hynix (+10%).

Zooming out, the CBOE Volatility Index, known as Wall Street’s “fear gauge,” was on the decline Tuesday after a brief surge to around 19.6 on Monday. Anything above 19.5 (the long-run average) is generally viewed as elevated.

While earnings continue to trickle in, these reports will impact share prices. But the bigger catalyst for further corrections is the tariff situation and potential fallout.

The uncertainty of if and when these tariffs may come into play, and the unpredictability of it all, is going to continue to weigh on global equities.

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