This earnings season could make or break the stock market rally. If companies can beat expectations, it could help to justify the recent rally. However, if earnings disappoint, it could lead to a sell-off.
This week, some of the biggest companies will report their 2nd-quarter earnings. Major companies like Tesla $TSLA, Netflix $NFLX, and banks report Q2 earnings this week.
Despite stubbornly high inflation, weak consumer demand, and the Federal Reserve's drawn-out tightening cycle, U.S. stocks have rallied this year.
Expectations are low though. Wall Street expects earnings for S&P 500 companies to decline for the 3rd straight quarter (and see the steepest drop since Q2 2020).
Expectations are low so positive surprises could boost stocks.
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