The S&P 500 rose Monday as Wall Street tried to rebound from a pullback last week, with tensions in the Middle East easing. Traders also looked ahead to the release of major tech earnings.
The broad market index traded 0.3% higher, while the Nasdaq Composite advanced 0.5%. The Dow Jones Industrial Average climbed 165 points, or 0.6%. Both the S&P 500 and Nasdaq are riding six-day losing streaks and fell 3.1% and 5.5%, respectively, last week.
U.S. crude prices fell more than 1% after Iran said it will not escalate the conflict with Israel. Investors had been concerned higher oil prices could contribute to inflation, leading the Federal Reserve to hold off on cutting rates.
“There are probably two dynamics at work behind the better tone in global stock markets … the decline in gold and oil prices, and the steadiness (rather than rise) in the USD,” said Thierry Wizman, global FX and rates strategist at Macquarie. “For one, concern over a spreading regional war in the Middle-East has faded. The movement away from a wider conflagration, and back to a ‘shadow war is probably why US bond yields are higher today.”
The moves higher come ahead major earnings this week, with the focus on “Magnificent Seven” tech companies. Chipmaker and artificial intelligence favorite Nvidia climbed 3%, rebounding from a nearly 14% sell-off last week. Arm Holdings also rebounded more than 5% Monday.
Companies including Tesla, Meta Platforms, American Airlines, Microsoft and Alphabet are all set to report in the week ahead. Tesla reports after the bell Tuesday and Facebook parent Meta is on deck Wednesday, while Intel and Microsoft report Thursday.
There is some potentially bigger news in the back part of this week, with GDP due out on Thursday and a key inflation reading on Friday, when the Commerce Department reports personal consumption expenditures price index data for March. The PCE deflator is the Fed’s preferred inflation gauge.
The Fed meets again April 30 to May 1, with officials now in the quiet period ahead of the meeting.
Correction: A previous version misstated when Apple would report earnings.
S&P 500 losing streak is uncommon, data shows
If the S&P 500 swings into the red on Monday, it would mark the 7th straight negative session for the broad index. That would be a first since 2020 and one of just a handful of occurrences in this century, according to Deutsche Bank.
A 7th down day would be the first since February 2020, when the market started to drop amid Covid fears. And it would be only the 6th time since 2000, according to bank data.
Here’s the 5 times this milestone was reached this century:
- October of 2008, amid the Global Financial Crisis
- October and November of 2016, heading into the presidential election
- July and August of 2011, with the U.S. debt ceiling and European crisis brewing
- November of 2011, also amid the European crisis
- February of 2020, as Covid began spreading globally
Bank research shows that the broad index typically sees a rebound after 6 down sessions in a row. Still, a run of 6 losing days is still fairly unique, with last week marking only the 9th time that it’s happened over the last decade.
— Alex Harring
JPMorgan moves Cisco to neutral, citing muted outlook
JPMorgan has moved to a neutral rating on Cisco, from a not-rated designation, citing the tech company’s muted outlook for the medium term.
Analyst Samik Chatterjee said in a note Monday that Cisco’s campus networking, a significant part of the company’s product revenue, is still facing challenges in relation to the broader recovery. Its network switches and wireless local-area network, or WLAN, enjoyed a surge in demand during the Covid-19 pandemic, he pointed out.
“With a recently refreshed installed base, the Campus market is now in correction; while the pace of incremental headwinds are moderating following a few consecutive quarters of declines, at the same time we expect a sluggish recovery tracking below the long-term growth rate before we return to normal replacement cycles,” Chatterjee wrote.
However, Splunk, which Cisco bought for $28 billion last year, is expected to bring incremental growth to Cisco’s overall top line, he said.
Chatterjee’s $53 price target suggests nearly 10% upside from Friday’s close.
— Michelle Fox
Gold hits one-week low
Gold futures were lower on Monday and were on pace for their first lost in three sessions.
Gold futures.
Bullion hit a low of $2,344.70 per ounce earlier on Monday, its lowest level since April 15. The VanEck Gold Miners ETF (GDX) is also on track for its worst day since Feb. 13.
— Brian Evans, Nick Wells
Stocks open higher
Traders work on the floor of the New York Stock Exchange.
NYSE
Stocks ticked higher on Monday, with Wall Street looking to rebound from a string of losses last week.
The S&P 500 inched up 0.4%, while the Nasdaq Composite added 0.32%. The Dow Jones Industrial Average climbed 94 points, or 0.61%.
— Brian Evans
See the stocks making premarket moves
These are some of the stocks making notable moves before the bell on Monday.
- Li Auto, Tesla — The electric vehicle makers slid more than 7% and 3%, respectively, following price-cut announcements. U.S. shares of Chinese electric vehicle makers Nio and Xpeng retreated in tandem.
- Verizon — The telecommunications giant traded 1.5% higher as earnings per share topped expectations and full-year guidance was affirmed.
- Hut 8 — Shares gained 2.6% after Benchmark initiated coverage of the data center operator with a buy rating.
— Alex Harring
Verizon shares rise after smaller-than-expected subscriber loss
A person walks by a Verizon store in Corte Madera, California, on Jan. 23, 2024.
Justin Sullivan | Getty Images
Shares of telecommunications giant Verizon were 2% higher in premarket trading after the company shed less subscribers than expected in the first quarter.
Verizon surpassed Wall Street’s earnings estimates in the first quarter, reporting $1.15 per share excluding items, compared to an estimate from analysts polled by FactSet that forecast $1.12. Verizon’s first-quarter revenue of $33 billion was slightly below estimates that called for $33.32 billion.
— Brian Evans
Europe stocks open higher
European stocks opened higher Monday, with the benchmark Stoxx 600 index up 0.5% by 8:05 a.m. London time.
The U.K.’s FTSE 100 climbed 1.1%, while France’s CAC 40 was 0.5% higher and Germany’s DAX was up 0.7%.
Stoxx 600.
The price of bitcoin was relatively calm over the weekend after another “halving” for the cryptocurrency.
— Jesse Pound, Tanaya Macheel
Futures open higher
Traders work on the trading floor at the New York Stock Exchange on April 5, 2024.
Andrew Kelly | Reuters
The three key futures contracts rose when trading opened at 6 p.m. in New York. Dow futures were briefly up 100 points.
— Jesse Pound
Last week in review
Here is where the key averages stand after Friday’s decline in tech:
- The S&P 500 fell 0.88% on Friday, its sixth negative session in a row.
- The S&P 500 closed the week down 3.05%.
- The Nasdaq Composite fell 2.05% on Friday, its sixth negative session in a row.
- The Nasdaq Composite finished the week down 5.52%.
- The Dow gained 211 points, or 0.56%, on Friday, its second positive session in a row.
- The Dow closed the week up 0.01%.
— Jesse Pound, Christopher Hayes
