The Dow Jones Industrial Average managed to break its four-day losing streak on Tuesday, closing higher and receiving support from robust earnings reports. The positive sentiment was buoyed by expectations surrounding earnings announcements from tech giants Alphabet and Microsoft, scheduled for release after the market closed.

On Monday, the Dow Jones fell by 190.87 points or 0.6%, settling at 32,936.41. The S&P 500 also saw a slight decline of 7.12 points or nearly 0.2%, closing at 4,217.04. However, the Nasdaq Composite showed resilience, gaining 34.52 points or 0.3%, reaching 13,018.33.

Earnings reports played a significant role in the Dow's rebound. Several blue-chip companies released stronger-than-expected results before the opening bell, providing the market with a boost. Market participants are eagerly awaiting the earnings reports from Alphabet and Microsoft, as they are key players in the technology sector.

The current earnings season has generally exceeded Wall Street's expectations, with approximately 23% of S&P 500 companies having already reported their earnings. Among these companies, an impressive 77% have surpassed analysts' predictions, according to data from FactSet. This positive trend has instilled confidence in investors and has contributed to the upswing in Tuesday's trading.

Investors have also found reassurance in the forward guidance provided by companies. Kent Engelke, chief economic strategist and managing director at Capitol Securities Management, emphasized that companies are not expressing concerns about inflation eroding their profit margins or painting a bleak future. This outlook has bolstered market sentiment and contributed to the recovery on Tuesday.

Louis Navellier, chairman and founder of Navellier & Associates, suggested that if the remainder of the earnings season continues to perform well, particularly among consumer-facing companies, this could lead to a robust Christmas rally and a positive end to the year.

Additionally, positive economic data provided further support to market sentiment. The S&P flash U.S. services-sector index rose to a three-month high of 50.9, up from 50.1. Similarly, the S&P U.S. manufacturing-sector index reached 50, a six-month high, up from 49.8. Readings above 50 indicate expansion in the respective sectors.

Inflation concerns have also eased, contributing to the improving sentiment. Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that sentiment has improved due to hopes that interest rates have peaked and inflationary pressures have cooled.

On the bond market front, the yield on 10-year Treasury bonds experienced a slight increase, rising by less than 1 basis point to 4.84% on Tuesday. This followed a brief surge above 5% on Monday. Market analysts are closely monitoring the supply-demand dynamics surrounding the Treasury auctions and the impact on yields. The announcement of next week's Treasury refunding will be crucial, as any reduction in auctions at the long end of the curve could be a response to recent yield movements.

Analysts believe that reviving the equity rally will not only require further declines in yields but also continued support from the ongoing third-quarter corporate earnings reporting season. Mark Newton, head of technical strategy at Fundstrat, predicts that stabilization in both equities and Treasuries may be a gradual process this week, given the anticipation of earnings reports from one-third of the S&P 500.

Overall, the Dow Jones breaking its losing streak, along with positive earnings reports and supportive economic data, has instilled optimism in the market. Investors are eager to see the outcomes of Alphabet and Microsoft's earnings, as they may further propel the market's upward trajectory.