Stock markets on Wall Street experience mixed reactions to commence a bustling week, brimming with corporate earnings and statistical data releases.
Market Action: Tech Titans Square off as Key Data Looms
In a rollercoaster trading session on Monday, the S&P 500 and Dow Jones inched ahead, with investors gearing up for a week brimming with crucial economic data and high-profile earnings from Wall Street behemoths, while keeping an eye on U.S. trade policy developments.
On the trade policy front, investors tuned in to company earnings and executive comments for clues about how President Donald Trump's new tariffs might impact business outlooks. This week, the spotlight will shine bright on the "Magnificent Seven" megacaps, such as Apple and Meta Platforms, as 180 S&P 500 companies prepare to share their earnings results.
As per Phil Blancato, CEO of Ladenburg Thalmann Asset Management, tech companies can continue to beat earnings expectations due to their resilience to tariffs. Blancato contends that it's highly unlikely that anyone would stop using a Microsoft operating system due to tariffs.
The market mood has generally been positive during earnings season so far, with S&P 500 earnings now anticipated to climb by 9.7% in Q1 2022 compared to the previous year, according to LSEG IBES.
By 9:40 a.m. ET, the Dow had risen 242.03 points, or 0.60%, to 40,355.53, while the S&P 500 had gained 10.25 points, or 0.19%, to 5,535.46, and the Nasdaq Composite had dipped 18.67 points, or 0.11%, to 17,364.27.
Investor's Radar: Big Tech Earnings and Jobs Report Highlight Busy Week
With the S&P 500 and the Nasdaq trading at their highest levels since April 2022, gains in Boeing after Bernstein’s rating upgrade boosted the Dow, while a 2% drop in Nvidia weighed on the Nasdaq.
China's Huawei Technologies is rumored to be preparing to test its artificial-intelligence processor, reportedly aiming to replace some Nvidia products.
While many companies have signaled the uncertainty caused by changes in the U.S. administration's trade policy, some have trimmed or withdrawn annual forecasts. However, hopes of de-escalation in U.S.-China trade tensions sparked optimism in markets last week, with all major indexes ending Friday with weekly gains. Despite this, conflicting claims on the state of negotiations from Beijing and Trump kept uncertainty elevated.
"The market just remains in this game of trying to figure out President Trump's next move on trade negotiations," said Blancato.
In addition to the tech earnings and trade developments, key economic data, including the monthly U.S. payrolls data and the personal consumption expenditures price index, will be released this week.
Since the presidential elections in November 2021, the S&P 500 has tumbled more than 4%, while falling around 10% from its February record high, as investors grapple with the potential impact of tariffs.
According to a Reuters poll, a majority of economists expect the global economy to face a high risk of slipping into a recession this year.
Web browser developer Opera's U.S.-listed shares surged by 8.6% after the company raised its annual revenue forecast, while Spirit AeroSystems rose 2.7% following news of Airbus' deal to take over some of the company's plants.
On the NYSE, advancing issues outnumbered decliners by a 2.24-to-1 ratio, while on the Nasdaq, the ratio was 1.68-to-1. The S&P 500 recorded 3 new 52-week highs and no new lows, whereas the Nasdaq Composite logged 19 new highs and 12 new lows.
- Investors are keeping an eye on U.S. trade policy developments and their potential impact on megacaps like Apple and Meta Platforms, as 180 S&P 500 companies prepare to share their earnings results.
- Tech companies, such as Microsoft, are believed to be resilient to tariffs and can continue to beat earnings expectations, according to Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
- The market mood has generally been positive during earnings season, with S&P 500 earnings now anticipated to climb by 9.7% in Q1 2022 compared to the previous year.
- In addition to the tech earnings and trade developments, key economic data, including the monthly U.S. payrolls data and the personal consumption expenditures price index, will be released this week.
- Despite conflicting claims on the state of negotiations from Beijing and President Donald Trump, hopes of de-escalation in U.S.-China trade tensions sparked optimism in markets last week, with all major indexes ending Friday with weekly gains.
