Wall Street Rebounds Due to Overseas Markets, Earnings

Wall Street rebounded sharply on Tuesday, led by solid overseas markets and strong earnings from Nike (NYSE: NKE) and Micron Technology (NASDAQ: MU), which drew bargain hunters back to the market.

The rebound originated in Asian markets, with Japan’s Nikkei 225 gaining 2.08% in overnight trading, erasing Monday’s losses, Shanghai’s Composite Index gaining 0.88%, and Korea’s Kospi 0.41%.

Then, it spread to Europe, with major equity market indexes gaining around 1.2%. Meanwhile, at 10.30 a.m, U.S. equity futures were trading higher, with the Dow Jones and the Russell 2000 leading the way.

Even Bitcoin, the digital currency selling off in recent trading sessions, staged a strong rebound, side by side with equities.

Further clarification of the nature of the Omicron variant of COVID-19 combined with a rebound in oil shares helped overseas markets rebound, setting the stage for Wall Street’s rebound.

Solid Earnings Results

On Monday afternoon, Nike reported a solid Q2, 2022, beating market estimates. Revenues came at $11.4 billion, up 1% from last year, while Diluted earnings per share for the quarter were $0.83, up 6%.

NIKE Direct sales reached $4.7 billion, up 9%, while NIKE Brand Digital sales increased 12, led by 40% growth in North America, especially on Black Friday.

Nike’s financial results eased Wall Street’s concerns about global supply chain bottlenecks, though the company reported some supply chain problems with Asian sales. But traders and investors looked at the overall picture instead of the Asian sales, sending Nike’s shares 6% higher in early morning trade.

A strong report from Micron Technology eased investors’ concerns of semiconductor shortages, which have constrained the rebound of several industries in recent months.

The semiconductor company reported a GAAP net income of $2.31 billion, or $2.04 per diluted share on $7.69 billion shares, followed by an upbeat statement by its CEO.

“Micron delivered solid fiscal first-quarter results led by strong product portfolio momentum,” said Micron Technology president and CEO Sanjay Mehrotra. “We are now shipping our industry-leading DRAM and NAND technologies across major end markets, and we delivered new solutions to data center, client, mobile, graphics and automotive customers. As powerful secular trends including 5G, AI, and EV adoption fuel demand growth, our technology leadership and world-class execution position us to create significant shareholder value in fiscal 2022 and beyond.”

In Micron’s financial report, Wall Street liked what it saw, sending its shares 9% higher in early morning trade, with the rally spreading in other semiconductor shares, like Applied Materials, which rallied 3%.

Aiding the positive Wall Street sentiment was the rival of talks about President Joe Biden’s bill, which brought back bargain hunters to sectors that will be most benefited from it, like the EV sector.

Still, investors shouldn’t be carried too far away from Wall Street’s rebound, as Omicron and tapering could tame gains, as has been the case with most of the recent rebounds.

Disclosure: At the time of publication, Panos Moudoukoutas owned shares of Nike and Applied Materials.