Wall Street was mixed on Monday as investors took a breath at the start of an eventful week, with earnings, economic data, the U.S. Federal Reserve's rate decision and the ebb and flow of Middle East tensions all crowding the docket.
All three major U.S. stock indexes wavered close to unchanged. Trading was muted after last week's rally sent the S&P 500 and the Nasdaq to a series of record closing highs.
As of Friday, the S&P 500 was up over 100% since the bull market began in October 2022.
First-quarter earnings season has hit full stride, with a host of high-profile firms slated to report this week, including five of the Magnificent Seven technology megacaps, Amazon AMZN.O, Alphabet GOOGL.O, Meta Platforms META.O, Apple AAPL.O and Microsoft MSFT.O on deck. Investors will assess the extent to which these companies are beginning to reap benefits of massive expenditures on artificial intelligence.
As of Friday, 139 companies in the S&P 500 have posted first-quarter results. Of those, 81% have beaten estimates. Analysts now see aggregate S&P 500 earnings growth of 16.1% year-on-year, up from 14.4% on April 1, according to LSEG I/B/E/S.
The companies due to report this week account for roughly 44% of the S&P 500's market capitalization, according to Raymond James.
"The market during this month has reacted to the strong indications from companies in terms of earnings, and I think we're going to see more of that," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "Investors will be listening for more visibility into long-term growth with these big names."
Attempts to revive peace talks between the U.S. and Iran continue following U.S. President Donald Trump's decision to call off negotiators' trip to Islamabad for another round of face-to-face talks. Iran continues to restrict shipments through the Strait of Hormuz, with Iranian officials demanding that Washington lift its blockade as a precondition to further negotiation.
"Today, there's a lack of talk about U.S.-Iran negotiations, so that’s in limbo," Ghriskey added. "But the market is expecting some type of resolution at some point without putting boots on the ground."
On Tuesday, the Federal Reserve is scheduled to convene for its two-day policy meeting, widely expected to culminate in the decision to leave interest rates unchanged. The accompanying statement and Fed Chair Jerome Powell's press conference will be scrutinized for clues regarding the central bank's assessment of U.S. economic health and the inflationary impact of spiking energy prices resulting from the U.S.-Iran war.
The Dow Jones Industrial Average .DJI fell 82.97 points, or 0.17%, to 49,147.11, the S&P 500 .SPX gained 7.29 points, or 0.10%, to 7,172.37 and the Nasdaq Composite .IXIC gained 31.94 points, or 0.13%, to 24,868.54.
Of the 11 major sectors in the S&P 500, communication services .SPLRCL were enjoying the largest percentage gain, while consumer staples .SPLRCS were down the most.
Verizon VZ.N advanced 2.4% after the telecom company raised its annual forecast after reporting stronger-than-expected subscriber adds.
Domino's Pizza DPZ.O slid 8.9% after the pizza chain missed first-quarter sales estimates.
Nvidia NVDA.O jumped 3.4%, extending the prior session's 4.3% surge. The company has reclaimed a market valuation of more than $5 trillion.
Advancing issues outnumbered decliners by a 1.05-to-1 ratio on the NYSE. There were 264 new highs and 34 new lows on the NYSE.
On the Nasdaq, 2,158 stocks rose and 2,464 fell as declining issues outnumbered advancers by a 1.14-to-1 ratio.
The S&P 500 posted 17 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 114 new highs and 79 new lows.
Reuters
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