4:12pm: Big week for Big Tech
The Dow closed Monday up 184 points, 0.5%, at 35,411, the Nasdaq Composite added 26 points, 0.2%, to 14,059 and the S&P 500 improved 18 points, 0.3%, to 4,555. The small-cap Russell 2000 index gained 4 points, 0.2%, to 1,964.
The DJIA secured its eleventh-straight winning session, its longest such streak since 2017.
The gains were relatively modest as investors look ahead to Big Tech earnings from Microsoft, Meta and Alphabet this week, as well as the Federal Reserve's meetings on Tuesday and Wednesday.
The personal consumption expenditures index, which the Fed uses as a gauge of inflation, is also due at the end of the week.
12:05pm: Dow on track for 11 straight days of gains
US stocks were higher in noon trading ahead of some Big Tech earnings and the Federal Reserve interest rate decision later this week.
At midday, the Dow gained 199 points to 35,426, while the S&P 500 added 22 points at 4,558 and the tech-heavy Nasdaq rose 35 points to 14,068.
“So far, there’s no evidence of a recession. So as long as there’s no evidence of recession, and I think the market will probably continue to melt up; people are chasing,” Neuberger Berman senior portfolio manager Steve Eisman said.
Notable movers included shares of AMC Entertainment Holdings Inc, which soared 27% after a judge on Friday denied a proposed settlement related to AMC Entertainment’s plan to convert preferred shares into common stock.
9:40am: Critical week ahead
US stocks moved higher at the open on Monday fuelled by Big Tech earnings optimism ahead of the Fed’s latest interest rate decision due on Wednesday.
"The market will be watching closely to see if the Fed will signal its intention to pause rate hikes or whether it will give itself the flexibility to react to future economic conditions," commented FOREX.com senior market analyst Fiona Cincotta.
Ahead of earnings from Microsoft, Google parent Alphabet, and Meta, the tech-laden Nasdaq led the gains just after the opening bell, up 66 points or 0.5% at 14,098 points.
The S&P 500 had added 18 points at 0.4% at 4,554 points and the Dow Jones was up 82 points or 0.2% at 35,309 points, on track for an 11th winning session.
7:45am: Earnings, earnings, earnings!
US stocks are expected to open higher on Monday, extending recent gains at the start of a hectic week for central bank policy decisions, most importantly from the Federal Reserve, and one of the busiest weeks of the US earnings season.
About 40% of the Dow Jones Industrial Average (DJIA) and 30% of the S&P 500 will give their financial updates during the week, including tech giants Alphabet, Microsoft and Meta, plus Visa, GM, Ford, Intel, Coca-Cola and some energy giants including Exxon Mobil and Chevron.
In pre-market trading, futures for the DJIA were up 0.1%, while those for the S&P 500 added 0.2%, and Nasdaq 100 futures gained 0.3%.
On Friday, the blue-chip DJIA ended just 2.5 points, or 0.01% higher at 35,227, still extending its gains to a 10th day in a row, marking its longest rally since 2017. The S&P 500 finished Friday up 0.07%, but the Nasdaq Composite fell 0.2%.
On the central banks front, the Fed, the European Central Bank (ECB) and the Bank of Japan (BoJ) will all meet this week.
Investors anticipate that the Fed will increase rates by a quarter percentage point at the conclusion of its latest two-day policy meeting on Wednesday and will be listening closely to comments from chair Jerome Powell to get a sense of the central bank’s position on what happens next as it tries to navigate a soft landing for the US economy.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank noted that "activity on Fed funds futures gives almost 100% chance for this week’s 25bp hike."
"But," she added, "many think that this week’s rate hike could be the last of this tightening cycle, as inflation is cooling. But the resilience of the US labour market, and household consumption will likely keep the Fed cautiously hawkish, and not announce the end of the tightening cycle this Wednesday.
"There is, on the contrary, a greater chance that we will hear Fed chair Jerome Powell rectify the market expectations and talk about another rate hike in September or in November. Therefore, the risks tied to this week’s FOMC meeting are tilted to the hawkish side, and we have more chance of hearing a hawkish surprise rather than a dovish one."
"Regarding the market reaction, as this week’s Fed meetings falls in the middle of a jungle of earnings, stock investors will have a lot to price on their plate, so a hawkish statement from the Fed may not directly impact stock prices if earnings are good enough. Bond markets, however, will clearly be more vulnerable to another delay of the end of the tightening cycle," Ozkardeskaya noted.
On the economic calendar, the latest global flash PMI figures are released today, but investors will most keenly watch the key personal consumption expenditures (PCE) index, the Fed’s preferred inflation gauge, which is due at the end of the week.