Earnings from big-name companies like Apple, Amazon, Facebook (Meta), and Google (Alphabet) have the power to move whole indexes like the S&P500. As these big-name stocks have a large weighting in the indexes, a surprise earnings announcement can impact wider risk sentiment and cause indexes like the Dow, S&P500, and Nasdaq to move sharply higher or lower.

This earnings season is very important because investors want to see if the US consumer is starting to slow down their activity. Apple’s earnings on Thursday have the potential to move markets sharply, for example, if investors see a big miss in the earnings expected.

Big-name stocks can move sharply on surprise earnings announcements that deviate strongly from market expectations. Some traders attempt to trade these surprise announcements, but beware as trading them can be volatile.

Earrings for this quarter will get a lot of market attention. It will be a miss in the data that market participants will be most sensitive to as this could be a signal to the Fed to pause its rate hiking cycle.

A fifth of S&P500 companies have now posted Q3 earnings and more than 50% have outperformed estimates.