Before the bell: Focus on the Magnificent Three

Investors are looking ahead today to the quarterly results from Microsoft, Tesla and Meta. The Federal Reserve will also announce its interest rate decision later this evening.

The S&P 500 closed at a new record on Tuesday at 6,978.6 points. UnitedHealth (-19.6%) reported quarterly results that were overshadowed by a new decision from the US government. From 2027 onward, Medicare reimbursement rates will be increased less aggressively than previously expected, directly impacting UnitedHealth as the largest health insurer. Sector peers revealed similar losses, with Humana (-21.1%) and CVS Health (-14.0%) also hit hard.

In Asia this morning, Indonesia stands out. The Jakarta Composite Index plunged by as much as 7% after index provider MSCI warned it may reduce the weighting of Indonesian equities in its indices. Some listed Indonesian companies lost up to 15% of their value during the session.

Whether the S&P 500 will break through the 7,000-point mark in the coming days will largely depend on two factors. First, technology giants Microsoft (+2.2%), Meta (+0.1%) and Tesla (-1.0%) will publish their quarterly results later today. With a combined weight of around 11% in the index, they have the power to shape overall market sentiment. Second, the Federal Reserve will hold its policy meeting tonight. No rate cut is expected, but markets are primarily focused on any guidance that could provide insight into the future path of interest rates.

Investors can also react to the results from LVMH (+0.2%). The French luxury group reported better-than-expected quarterly figures after the close on Tuesday. Excluding Japan, Asia showed a strong recovery this morning, driven in particular by solid performance in China. ASML (+3.4%) already published record results today. The company reported 13.2 billion euro in new orders, far exceeding the 6.3 billion euro expected by analysts. In addition to the previously mentioned Magnificent Seven companies, Starbucks, AT&T and IBM will also release quarterly figures later today.

Hard drives are worth their weight in gold

Are you familiar with US company Seagate Technology? Relatively unknown in Europe, the company has a market capitalisation of 81 billion dollar and has gained an astonishing 270% over the past year. The reason lies in the sector it operates in. Seagate develops and produces hard drives and related storage solutions. That may not sound exciting at first, until you realise the company focuses on high-capacity storage for data centres, cloud computing and AI applications.

Capacity shortages have made the sector particularly attractive to investors. Since September, storage prices have in some cases doubled, with further price increases planned for 2026. A few months ago, a 24-terabyte Seagate BarraCuda hard drive could be purchased for between 240 and 300 dollar. Today, the same internal hard drive costs around 499 dollar. Much of the capacity for the coming months is already sold out, continuing to push prices higher. This trend is clearly reflected in Seagate’s quarterly results. On Tuesday after the close, the company once again reported figures well above expectations. In after-hours trading, the stock jumped 10%.

Europe’s largest listed company surprises again

In yesterday’s after-market commentary, we already discussed the results of LVMH, formerly Europe’s largest listed company. Today, that title belongs to the Dutch company ASML, headquartered in Eindhoven. The reason? Unlike LVMH, ASML continues to surprise analysts quarter after quarter with its growth. This morning, the group announced no less than 13.2 billion euro in new orders, far above the 6.3 billion euro analysts had expected. That may also divert attention from the profit figures. While net income of 2.84 billion euro was certainly solid, it did come in around 160 million dollar below market expectations.

Thanks to its strong order book, ASML expects to report revenue between 34 and 39 billion euro in 2026, once again exceeding the 35.1 billion euro investors had anticipated. With such strong figures and growth prospects driven by the AI boom, ASML fully deserves its position as Europe’s largest listed company.

Did you know…

that in 2025 five of the seven ‘Magnificent Seven’ stocks underperformed the S&P 500? Without the strong rally in Alphabet (+65%), the Magnificent Seven as a group would not have outperformed the broader S&P 500.

This article was translated from Dutch and was originally published on Spaarvarkens.be.