U.S. stocks were higher on Monday as geopolitical tensions in the Middle East showed signs of easing while investors geared up for a highly anticipated week in financial markets. The tech-focused Nasdaq Composite (^IXIC) jumped around 0.5%, while the S&P 500 (^GSPC) saw a 0.4% increase. Meanwhile, the Dow Jones Industrial Average (^DJI) climbed by approximately 250 points, or 0.7%.
Investors are looking forward to a busy week, with several key players in the tech sector set to release earnings, alongside crucial economic updates including the Federal Reserve’s inflation metric and October’s jobs report. This week’s insights could have a significant impact on the market, particularly as questions surrounding Big Tech's growth momentum and macroeconomic resilience continue to shape investor sentiment.
Market Movers:
- Philips (PHG): Shares dropped 16% after the medical device company revised down its full-year sales forecast, citing a notable decline in demand from China.
- Trump Media & Technology Group (DJT): Stock surged by nearly 20%, extending a five-week rally as optimism grew among investors regarding former President Donald Trump’s re-election prospects following a high-profile rally in Manhattan.
- Spotify (SPOT): Shares rose by around 1% following Wells Fargo’s revised price target of $470, bolstering investor confidence. The analyst praised Spotify’s margin expansion efforts and strategic turnaround, which have supported a notable recovery in stock performance.
- Boeing (BA): Shares fell slightly after the company announced a nearly $19 billion share sale to shore up its balance sheet and stave off a potential credit downgrade. The move follows challenges like labor strikes and a substantial workforce reduction.
Easing Oil Prices
Oil prices plummeted almost 6% in response to geopolitical developments, with Brent crude falling to around $71 per barrel and West Texas Intermediate nearing $67. The easing tensions between Israel and Iran, with military strikes limited to specific targets, soothed concerns about disruptions to oil supply. The energy sector faced pressure as a result, with the Energy Select Sector SPDR Fund (XLE) down by roughly 1%.
Big Tech Earnings On Deck
The tech sector has high stakes this week as Alphabet (GOOGL, GOOG), Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Meta (META) are all slated to release earnings reports. These "Magnificent Seven" companies are expected to reveal more about how investments in AI and other innovations are affecting profitability. Wall Street has tempered expectations, projecting the slowest growth rate in six quarters.
Inflation and Employment Data Loom
This week’s economic calendar also features key data that could impact Federal Reserve policy, particularly regarding interest rates. The Personal Consumption Expenditures (PCE) price index, a preferred inflation gauge, and the October jobs report are both due, and investors are hoping for signs that a “soft landing” for the economy is still achievable.
Looking Ahead
As earnings season ramps up, investors are watching for broader trends that could influence the Fed’s interest rate path. With inflation data and employment figures poised to arrive, investors remain cautiously optimistic but sensitive to any signs of economic weakening or inflationary pressure. How Big Tech’s earnings unfold will also be critical to understanding if AI and tech spending are sustaining growth for these industry giants amid a slower economy.