Big tech earnings drove a stock market rally. They won’t be enough this time

Big tech earnings aren’t providing a clear story at a time when the stock market needs one.

A look at Microsoft’s results tell an investor that business-to-business spending might be picking back up and declines in cloud spending have bottomed. A peak at Google’s release tell that investor the opposite.

The result is a familiar feeling for investors over the past month: Little conviction on what might happen next. Google shares sold off about 9% while Microsoft salvaged gains of 3% as a rise in bond yields once again dragged the broader indexes lower and the tech-heavy Nasdaq Composite (^IXIC) had its worst single day of trading in roughly eight months.

“There’s real dispersion,” BlackRock’s Global CIO Rick Rieder said referencing Microsoft and Alphabet earnings. “We’re getting a series of conflicting signs around market. That’s why markets are so jumpy, so uncertain.”

The signs Rieder refers to have been building in both directions over the past month as debate over what’s next for the Federal Reserve in its fight to bring inflation down has hung over markets.

Some are risks outside the norm, like a boiling geopolitical feud in the Middle East, and a 22-day saga in Washington that ended with a new House Speaker but is still a “good news, bad news” situation according to Qontigo managing director Melissa Brown.

“There’s good news in that there’s been an uncertainty lifted” Brown told Yahoo Finance Live. “On the other hand it might be replaced by a different uncertainty about whether the government is going to shut down and really what’s going to happen with spending.”

Others are more market centric stories. There have been hints that the financial tightening caused by the Fed’s aggressive interest rate hiking campaign could suffocate what’s been an otherwise resilient economy. And some have still called for more rate hikes as inflation’s path downward has begun to slow.

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But importantly, as Rieder highlighted, the news hasn’t all been negative. The economy has still shown resilience. And backed by a strong labor market and increasing manufacturing…

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