U.S. stocks closed higher Monday, extending a recent rally as investors positioned ahead of major corporate earnings reports and a closely watched Federal Reserve policy meeting later this week.
By yourNEWS Media Newsroom
U.S. equities finished higher Monday, with the S&P 500 and Nasdaq Composite posting a fourth consecutive day of gains as investors prepared for a wave of earnings from some of the market’s largest companies and awaited signals from the Federal Reserve on interest rate policy.
Both indexes reached their highest levels in more than a week, marking their longest winning streak since December. The advance was driven largely by gains in a small group of mega-cap stocks, including Apple, Microsoft, Alphabet, Broadcom and Meta, which provided the biggest boosts to the S&P 500.
Several of those companies — including Apple, Meta, Microsoft and Tesla — are scheduled to report quarterly results later this week, a period investors see as a key test for a market rally that has been fueled by enthusiasm around artificial intelligence. Market participants are looking for evidence that heavy spending on AI is translating into measurable returns, particularly as concerns persist about elevated valuations in the technology sector. Analysts said forward guidance will be closely scrutinized, with even minor disappointments potentially prompting a reassessment of the AI-driven trade.
“You’re seeing communications and technology trading well today in advance of the earnings from a lot of the large companies,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management in Charlotte, North Carolina. “It seems like we’re having an expansion in corporate profits and an expansion in the economy, so generally speaking, investors are cautiously optimistic and most likely looking forward to earnings season.”
So far, earnings results have largely exceeded expectations. Of the 64 S&P 500 companies that had reported quarterly results as of Friday, nearly 80 percent posted earnings above analyst forecasts, according to data compiled by LSEG.
By the close, the S&P 500 gained 34.52 points, or 0.50 percent, to 6,950.13. The Nasdaq Composite rose 102.54 points, or 0.44 percent, to 23,603.78. The Dow Jones Industrial Average added 307.91 points, or 0.63 percent, ending at 49,406.62.
Among the S&P 500’s 11 major sectors, communications services posted the strongest gains, while consumer discretionary lagged, weighed down in part by weakness in Tesla. The materials sector also advanced as gold prices surged above $5,000 an ounce for the first time, lifting shares of gold producers such as Newmont.
Investors were also focused on the Federal Reserve’s two-day policy meeting, which begins Tuesday and concludes with an announcement Wednesday afternoon. Futures markets indicate traders see a greater than 97 percent chance the central bank will hold interest rates steady. Even so, investors are watching closely for any indication of the Fed’s longer-term rate outlook.
The meeting comes amid heightened attention on the central bank following the Justice Department’s recent probe into Chair Jerome Powell and comments from President Donald Trump suggesting a successor could be named soon. Chris Larkin of E*Trade from Morgan Stanley said the Fed’s announcement is likely to keep political considerations in the spotlight.
In individual stocks, Intel shares continued to slide after plunging 17 percent on Friday, their steepest one-day drop in nearly 18 months, after the company forecast quarterly profit and revenue below expectations.
JetBlue and other airline stocks lagged as the sector grappled with widespread flight disruptions following a major winter storm in the eastern United States.
Shares of prison operators GEO Group and CoreCivic fell sharply after Senate Democrats said they would oppose a funding bill for the Department of Homeland Security, which oversees Immigration and Customs Enforcement. The comments followed public backlash after the fatal shooting of a 37-year-old nurse, Alex Pretti, by immigration agents in Minneapolis over the weekend.
Elsewhere, shares of USA Rare Earth jumped after reports that the U.S. administration plans to take a 10 percent stake in the miner as part of a $1.6 billion debt-and-equity investment package. CoreWeave also advanced after Nvidia said it would invest $2 billion in the cloud infrastructure company.
Markets remain focused on the convergence of earnings results, monetary policy signals, and political developments as the week unfolds.