4:15pm: Palantir earnings eyed
Stocks finished the day higher as Wall Street continued to build on last week’s rally, spurred by a cool jobs report and strong Big Tech earnings.
The tech-heavy Nasdaq led the gains, up 1.2% at 16,349 points.
The S&P 500 added 1% at 5,180 points and the Dow Jones was up 0.5% at 38,852 points.
Data analytics firm Palantir Technologies Inc (NYSE:PLTR) finished the day 8.1% higher and EV-maker Lucid Group Inc (NASDAQ:LCID) added 9.5% ahead of their quarterly earnings reports due after the market closed.
12:10pm: Strong oil prices help drive market higher
Oil prices edged up on Monday, leading markets higher on gains in energy-related stocks.
The S&P 500 Energy Sector Select ETF (XLE) surged over 1%, leading overall market gains.
At midday, the S&P 500 had gained 0.6% while the tech-heavy Nasdaq rose 0.7%. The Dow Jones Industrial Average increased roughly 0.2%.
Renewed geopolitical tensions and Saudi Aramco's price hike for Asian customers signaled tight supply, boosting crude futures. West Texas Intermediate (WTI) rose to over $78 per barrel, while Brent surpassed $83 per barrel. Last week's 6% oil price drop amid ceasefire hopes between Hamas and Israel dimmed by Monday.
In trending stocks, Palantir Technologies saw a 6% rise ahead of its Q1 earnings report, with analysts focusing on its AI platform. Conversely, Tyson Foods shares dropped 7.78% despite beating revenue estimates due to operational issues. Investors await Disney's quarterly results, keen on streaming growth, park attendance, and summer box office outlook.
In economic data this week, the focus will be on key economic indicators such as the FRB's Senior Loan Officer Opinion Survey (SLOOS), consumer credit data, and the Philadelphia Fed's Survey of Professional Forecasters (SPF), which measures inflation expectations.
Additionally, there will be speeches from FOMC speakers, including FRB Presidents Barkin, Williams, Kashkari, and Goolsbee, offering insights into the path forward for interest rates and financial stability.
Analysts anticipate robust consumer borrowing in March and a slight decline in the University of Michigan's consumer sentiment index for May. Inflation expectations, highlighted by recent upticks, will also be closely watched.
Finally, the Monthly Treasury Statement release on Friday is expected to show a 5.5% increase in revenues year-to-date compared to the same period in 2023.
9:55am: Wall Street opens with confidence
Stocks opened higher on Monday, extending gains from the end of last week following a softer-than-expected jobs report, which fueled expectations for an earlier rate cut by the Federal Reserve.
Just after the opening bell, the S&P 500 was up 0.6% at 5,156 points and Nasdaq rose by 0.6% at 16,259, while the Dow Jones Industrial Average increased by 0.3% at 38,791.
Investors were encouraged by data last week showing job growth that is strong enough to indicate a healthy economy, but not too strong to suggest potential inflationary pressures that might prompt the Federal Reserve to aggressively raise interest rates.
“For now, based on Powell’s tone, this bird is a dove that hopes the data stops trending higher,” said Jay Woods, chief global strategist at Freedom Capital Markets (NASDAQ:FRHC).
“They are patiently waiting for this transitory period to calm and economic numbers ease based on our current higher rates. The path forward remains wait-and-see as the Fed believes more time is needed for its former hikes to have their desired impact.”
Bets are now on a September rate cut by the Fed, with many market watchers expecting at least two cuts by year-end.
In corporate news, Disney's earnings report takes the spotlight this week as earnings season winds down, while Apple's shares dipped slightly after Warren Buffett disclosed Berkshire Hathaway's reduced holdings. Additionally, RobinHood revealed it received a "Wells Notice" from the SEC regarding potential securities violations related to crypto trading.
8:31am: Wall Street rally continues
US stocks are set to start the week on the right foot when markets open on Monday.
Futures for the three major indexes show the Dow Jones and the S&P 500 adding 0.3% while the Nasdaq is set to gain 0.2%.
Investor sentiment has been buoyed by Friday’s April jobs report. It showed a slowdown in growth in the labor market, reviving hopes the Federal Reserve will begin to cut interest rates this year.
More than two-thirds of market watchers now believe the Fed will cut interest rates in September, according to the CME FedWatch Tool.
Earnings season has been “fine so far” with better-than-expected reports from Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL, ETR:APC) helping the S&P 500 gain 0.6% last week, Swissquote Bank senior analyst Ipek Ozkardeskaya highlighted.
“Six of the Magnificent 7 stocks reported earnings so far and their results beat lofty market expectations. Nvidia is not due to report before the 22nd of May,” Ozkardeskaya said.
“Beyond the Magnificent 7, 77% of the S&P 500 companies have reported a positive earnings per share (EPS) surprise so far, according to FactSet. The blended year-over-year earnings growth rate for the S&P 500 printed a strong 5% versus the 3% to 4% expected by analysts."
Investor attention is now turning to Disney, which will hand down its quarterly report before the market opens on Tuesday.
Other highlights from this week’s earnings calendar are Ferrari (NYSE:RACE), Datadog, Kenvue, Electronic Arts, Uber, Anheuser-Busch, Airbnb, Shopify, Roblox, and Soho House.