BY MIRABEL ODETA
Stocks advanced on Monday, with the S&P 500 and Nasdaq climbing to their highest levels in more than a week as investors positioned themselves ahead of a packed stretch of corporate earnings and a closely watched Federal Reserve policy decision. Both benchmarks notched their fourth straight session of gains, putting them on course for their longest winning streak in over a month and signaling renewed confidence after recent market volatility.
The focus this week is firmly on results from some of the largest and most influential technology companies in the world. Apple, Meta, Microsoft and Tesla are all due to report quarterly earnings in the coming days, a lineup that is expected to test the durability of a rally fueled largely by optimism around artificial intelligence.
Investors are increasingly looking for tangible evidence that massive AI-related investments are translating into meaningful revenue and profit growth, especially as concerns persist over stretched valuations across the tech sector. Market participants say forward-looking guidance will be critical, with even a slight disappointment potentially prompting a reassessment of the AI-driven trade.
Market sentiment has also been buoyed by easing trade tensions. Last week, former U.S. President Donald Trump softened his stance on potential tariffs against the European Union tied to the Greenland dispute, a move that offered some relief to global markets and reduced near-term geopolitical uncertainty.
So far, the earnings season has delivered encouraging results. Of the 64 companies in the S&P 500 that had reported earnings by Friday, nearly 80% exceeded analyst expectations, according to data compiled by LSEG, reinforcing hopes that corporate America remains resilient despite higher interest rates and slowing global growth.
By late morning trading, major indexes were firmly in positive territory. The Dow Jones Industrial Average rose more than 150 points, while the S&P 500 and Nasdaq Composite posted gains of over half a percent, reflecting broad-based buying across several sectors.
Not all stocks shared in the rally. Intel shares extended losses, falling another 5% after suffering their steepest single-day decline in nearly 18 months at the end of last week. The semiconductor giant disappointed investors after forecasting quarterly profit and revenue below market expectations, renewing concerns about its competitive position in the fast-evolving chip industry.
Airline stocks also came under pressure as a powerful winter storm disrupted flight schedules across the eastern United States. United Airlines slipped 1.2%, while JetBlue dropped 2.8%, as investors weighed the potential financial impact of widespread cancellations and delays.
In contrast, materials stocks were among the strongest performers of the session. The sector benefited from a surge in precious metals prices, with gold vaulting to a fresh record above $5,000 an ounce. The rally in bullion lifted shares of gold miners such as Gold Fields and Harmony Gold, which gained on expectations of improved margins and cash flows.
Attention is now turning to the Federal Reserve, which begins its two-day policy meeting on Tuesday. While investors widely expect policymakers to leave interest rates unchanged, the announcement is likely to attract heightened scrutiny amid renewed questions over the central bank’s independence.
Those concerns intensified after the Justice Department opened a probe into Federal Reserve Chair Jerome Powell earlier this month, while Trump has said a decision on the next Fed chair could come soon.
Elsewhere in the market, USA Rare Earth shares surged 11% following reports that the U.S. administration is set to take a 10% stake in the company as part of a $1.6 billion debt-and-equity investment package, highlighting growing government interest in securing critical mineral supply chains. Cloud infrastructure firm CoreWeave also jumped sharply after Nvidia announced plans to invest $2 billion in the company, underscoring continued enthusiasm for AI-related infrastructure plays.
Original article
Comments