The tech sector keeps swinging between gains and losses, and today it is back on the down side. A decent bounce in tech appeared the day before, but on an intraday basis most of those gains were given up, and the close was more bearish than a bull would want. Overseas, the KOSPI moved down again, which is pressing on the NeoCloud names and the memory names, and that is dragging technology lower this morning.
Trading continues around the 50-day moving average. Until the direction of that moving average is clear, the market likely stays in this consolidation. Earnings are coming, but they may not be big headline movers given the implied volatility on the bigger names reporting over the next 24 to 48 hours. The prior day's bounce could end up being a dead cat bounce in the names that were heavily oversold on Friday.
GE Aerospace (GE)
Shares were down about 2.9% in pre-market trading even though the company beat on both the top and bottom line. Revenue came in at $13.3 billion against an estimate near $12.88 billion, with total revenue up about 18% year over year. Adjusted earnings per share were $2.25 versus an expected $2.21. Commercial services revenue rose about 23% year over year, and the backlog of orders was up 49% year over year. Commercial engines and services segment revenue grew 21%. Guidance was raised in some parts of the fiscal-year outlook. The market had already priced this one for perfection. Demand is still strong, and no near-term slowdown is expected unless a bigger global economic slowdown hits, which is not in the current guidance. The pullback came despite solid results.
Northrop Grumman (NOC)
A slight top-line miss: revenue of $11.12 billion against about $11.14 billion expected, depending on the estimate. Adjusted EPS was $7.89 versus a $7.18 street view. New awards for the quarter were $6.4 billion, pushing the book-to-bill ratio to 1.5 times. Backlog reached a record $109.6 billion. Aeronautics systems sales grew 14% year over year on higher B-21 bomber sales and F-35 production. Defense systems were up about 12% year over year. The company raised its fiscal-year adjusted EPS guidance and reaffirmed its fiscal-year 2026 revenue guidance, saying the record backlog leaves it well positioned long term. Shares were up about 0.6%. Decent earnings, but a small response. These shares need a stronger trigger to turn around the past year's weakness.
General Motors (GM)
Shares first popped on the results, possibly tied to the buyback, then fell. Revenue was $50.02 billion, beating the $48.7 billion estimate. Adjusted EPS was $3.70 versus $3.63 expected. Revenue growth was about 2.9% year over year. Automotive operating cash flow grew 33%, and adjusted automotive free cash flow grew 40% year over year. The company narrowed its fiscal-year 2026 EBIT guidance. Leadership struck a cautious tone on inflation costs, especially logistics, plus energy and tariff costs, and on whether the consumer stays resilient. Shares fell about 7.6%. GM had a strong run over the past couple of years, so this may be a right-sizing of price and valuation, with management now warning that these headwinds could creep into the business and hurt margins.
Apple (AAPL)
This hit is about iPhone shipments, not the Duo device. Apple is set to ship fewer iPhones for the rest of 2026, which could cut into revenue. Loop Capital downgraded the stock to hold from buy and cut its price target to $330 from $370. Supply chain checks suggest Apple will not recover from a 13 million iPhone shipment cut seen in 2026. Loop now expects about 79 million iPhones delivered in the December quarter versus the street's 85 million estimate. A separate report this morning says the UK's Competition and Markets Authority wants more transparency on Apple's NFC, or non-contact, technology, which is also weighing on the stock. Apple has a shortage of iPhones available for sale while demand stays relatively high, but Loop does not believe Apple can recover that lost demand or that the demand will hold into 2027.
S&P 500 levels (SPX)
The watched range is about 100 points: 7,720 to the upside and 7,620 to the downside. The VIX sits near 19, implying roughly a 1.2% move either way. Positioning starts the session a bit bearish. The market likely keeps churning until a supportive narrative forms under the technology sector. If names like CoreWeave (CRWV) keep breaking below the $60 level aggressively, volatility is likely to continue heading into the next couple of days of earnings.
