Equities: Tech rebound faces SpaceX earnings test - Danske Bank

Danske Research Team highlights a tech-led rebound in US equities, with Nasdaq up 1.1% and S&P 500 up 0.4%, while European Stoxx600 fell 0.8%. The move was driven by a narrow group of tech and consumer discretionary names such as SpaceX and Amazon, with the upcoming SpaceX earnings seen as a near-term test for the AI narrative.

Narrow tech rally after prior sell-off

"US equity indices were stronger yesterday, led by the tech, while the less-tech exposed indices had a tougher day. Nasdaq rose 1.1%, while S&P500 rose 0.4% with only 35% of the names higher on the day."

"European Stoxx600 declined 0.8%. The consumer disc also had a strong day, ending 2.7% higher, however this was virtually only driven by SpaceX and Amazon."

"The tech-led rally yesterday was essentially a mirror image of last week, with a narrow set of names performing in tech, with the equal-weight index underperforming the market cap."

"The tech sector managed to rally despite another rise in Treasury yields, suggesting yesterday's move was less about easier financial conditions and more about investors seeing last week's sell-off as too much, with tonight's SpaceX earnings report as the near-term test for the AI-narrative."

"Overnight, Asian equities are mostly lower, failing to extend the tech rally in US hours yesterday. European futures are lower, while US futures are higher. It is particularly noteworthy again that the S&P500 leads futures higher, with Nasdaq trailing."