Tech Sector Rebounds, Enphase Shines, Wells Fargo Falls Early in Earnings Season

The S&P 500 rose 0.6% on Friday, July 12, 2024, reversing losses as the technology sector surged and earnings season kicked off with reports from major banking institutions. Enphase Energy shares shone brightly as the company unveiled new solar equipment that allows U.S. customers to qualify for federal tax credits. However, Wells Fargo shares fell after the bank reported a drop in net interest income.

After a brief pause in Thursday’s rally, major U.S. stock indexes rebounded. A sell-off in technology stocks proved short-lived, with the sector rebounding strongly in the final trading session of the week. This upbeat mood coincided with the start of earnings season, which includes a slew of reports from several of the country’s largest financial institutions.

The S&P 500’s 0.6% gain partially recovered losses from Thursday’s decline, closing just below Wednesday’s record high. That gain similarly set the Nasdaq just below its all-time high reached in midweek. Also, after hitting an intraday record, the Dow closed down 0.6%, surpassing 40,000 for only the second time in history, a milestone first reached in mid-May.

Enphase Energy saw a significant gain, with its shares rising 6.9% after the company introduced new residential and commercial solar equipment made in the U.S. The new products help customers qualify for the Domestic Content Bonus under the Inflation Reduction Act, making Enphase Energy the best-performing stock in the S&P 500 on Friday.

Despite mixed reactions to earnings reports, Bank of New York Mellon shares rose 5.2% to an all-time high. The bank reported better-than-expected second-quarter revenue and profit, driven by higher fee income. Although net interest income fell from a year earlier due to changes in the bank’s balance sheet structure, it still beat expectations.

Ford shares rose 4.2%, boosted by reports that the automaker is offering 0% financing on leases for its Mach-E and F-150 Lightning electric vehicles. The move follows Tesla’s similarly favorable financing deal in May for its Model Y, as the two companies vie for a dominant position in the fast-growing electric vehicle market.

Wells Fargo shares, meanwhile, fell 6.1%, the sharpest decline among S&P 500 components, after the bank reported a drop in net interest income. The decline overshadowed Wells Fargo’s better-than-expected revenue and earnings per share results. The banking sector’s net interest income struggled with higher deposit rates and fierce competition for customer deposits following a regional banking crisis in 2023.

Delta Air Lines shares fell 3.1%, extending losses from the previous session after the airline missed second-quarter profit estimates. Increased capacity, which has cut fares, and higher costs dragged down Delta’s results, while the airline’s future prospects also cast doubt on the summer travel season.