NEW YORK: Wall Street’s main indexes climbed on Monday as investors braced for earnings from megacap growth and technology companies, while focusing on an interest rate decision from the Federal Reserve.
All eyes will be on the quarterly reports of Microsoft , Google-owner Alphabet and Meta Platforms this week, as market participants will be keen to know whether their earnings justify sky-high valuations.
The action-packed week also includes the Fed’s policy meeting, with the central bank expected to raise interest rates by 25 basis points on Wednesday.
A majority of economists polled by Reuters expect this to be the last increase of the current tightening cycle, after data this month showed signs of disinflation.
“It’s a pretty important week for investors who may be a little cautious because of the earnings and also about what the Fed will say,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Helping the Dow notch its longest winning streak in over six years, Chevron gained 3.2% as the oil giant posted upbeat preliminary quarterly earnings over the weekend.
As of Friday, second-quarter earnings are expected to decline by 7.9%, according to Refinitiv data.
Zaccarelli linked Dow’s rally to investors looking for parts of the market like energy, financials and healthcare that are still not expensive.
At 11:34 a.m. ET, the Dow Jones Industrial Average was up 185.61 points, or 0.53%, at 35,413.30, the S&P 500 was up 17.55 points, or 0.39%, at 4,553.89, and the Nasdaq Composite was up 11.54 points, or 0.08%, at 14,044.34.
The tech-heavy Nasdaq has rallied 34% so far this year, outperforming its Wall Street peers, as rate-sensitive megacap growth companies jumped on hopes of an end to the Fed’s tightening cycle and optimism over AI.
Ten of the 11 major S&P 500 sectors were higher, led by a 2.1% gain in energy stocks.
Toymaker Mattel rose 1.9% as the “Barbie” movie set a record as the biggest domestic debut of 2023.
AMC Entertainment jumped 31.6% after a judge blocked the theater chain’s stock conversion plan that risked diluting investors’ holdings in the company. AMC’s preferred shares fell 2.2%.
Exchange operator Nasdaq trimmed the weight of a handful of companies that make up close to half of the Nasdaq 100 to address “overconcentration” in the benchmark.
Meanwhile, business activity slowed to a five-month low in July, dragged down by decelerating service-sector growth, a survey showed.
Advancing issues outnumbered decliners by a 1.75-to-1 ratio on the NYSE and a 1.08-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and one new lows, while the Nasdaq recorded 41 new highs and 67 new lows.
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