Stocks ended mixed Monday as investors headed into perhaps the most important week of the year for global markets, with a plethora of blue chip earnings, a trio of central bank rate decisions and a crucial July jobs report.
The Dow Jones Industrial Average slipped 49 points, or 0.12%, to finish the session at 40,539.93, while the S&P 500 edged up 0.08% to 5,463.54 and the tech-heavy Nasdaq gained 0.07% to end the day at 17,370.20.
ON Semiconductor surged 11.5% after reporting better-than-expected earnings and revenue and Tesla rose 5.6% after Morgan Stanley named the electric vehicle maker's stock a top pick.
“Investors recently responded favorably to current conditions and put more risk in their portfolios,” said Jeffrey Roach, chief economist for LPL Financial. “The latest data show inflation rose a mere 0.07% as goods prices declined 0.17% but were offset by services prices up by 0.20%.”
"Inflation continues to moderate and is slowly approaching the Fed's target and giving the markets some confidence that the Fed will begin cutting rates at the September meeting," he added.
Updated at 9:34 AM EDT
Mixed open
The S&P 500 was marked 9 points higher, or 0.15%, in the opening minutes of trading, paired with a 0.41% gain for the tech-focused Nasdaq.
The Dow, meanwhile, edged 55 points lower with the Russell 2000 rising 0.24%.
S&P 500 Opening Bell Heatmap (Jul. 29, 2024)$SPY +0.17%🟩$QQQ +0.55% 🟩$DJI -0.20%🟥$IWM -0.05%🟥 pic.twitter.com/uZ5xJkZYmt
— Wall St Engine (@wallstengine) July 29, 2024
Updated at 7:31 AM EDT
Not lovin' it
McDonald's (MCD) share edged higher in premarket trading even after the world's biggest restaurant chain posted softer-than-expected second quarter earnings and its first quarterly sales decline in four years.
The group posted earnings of $2.97 per share, well shy of the Street's $3.17 forecast, and said global sales were down 1% from last year amid a pullback in restaurant spending.
McDonald's shares were marked 0.4% higher at $253.02 each, a move that would leave the stock down more than 15% for they year.
Stock Market Today
The five-day test, which also includes June quarter updates from four megacap tech stocks that comprise around 15% of the S&P 500's market value, comes at a crucial juncture for U.S. stocks, which are in negative territory for the month following last week's sharp tech-lead declines.
Concerns tied to the health of the U.S. economy, uncertainty surrounding the autumn presidential elections, the Federal Reserve's plans to reduce borrowing costs and the prospects for corporate earnings growth over the back half of the year have all combined to weigh heavily on stocks heading into the traditional August lull.
Earnings this week from Magnificent 7 leaders Microsoft (MSFT) , Apple (AAPL) , Meta Platforms (META) and Amazon (AMZN) will go a long way towards stabilizing investor sentiment if they can top Street forecasts and guide towards firmer growth over the coming months.
Softer-than-expected results and a muted outlook, however, could trigger further selling in the tech sector that could cascade into broader markets as 171 S&P 500 companies are slated to provide June quarter updates.
At present, with around 40% of the S&P 500 having reported June quarter earnings, analysts see collective profits rising 12.1% from the same period last year to around $500.7 billion.
That pace will slow to around 7.1% over the current quarter, however, as the economy cools and the labor market likely weakens from its current resilience, adding further pressure to the Federal Reserve to lower its benchmark borrowing costs in the early Autumn.
Related: PCE inflation report cements timing of next Fed interest rate cut
The Fed will hold its two-day policy meeting this week, with a rate decision and statement due Wednesday, but investors are betting the Chairman Jerome Powell and his colleagues will hold rates steady at between 5.25% and 5.5% while providing a clearer signal for a September rate cut.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is down 0.03% for the month, are priced for a 22 point opening bell gain.
Futures tied to the Dow Jones Industrial Average, meanwhile, suggest a 160 point opening bell boost, with the tech focused Nasdaq called 107 points higher.
Related: GDP report jolts Fed soft-landing hopes
In other markets, global oil prices were little-changed in early Monday trading following a tense weekend in the Gulf region following a deadly attack on Israeli civilians, including several children, in the Golan Heights that officials say was carried out by Iran-backed Hezbollah.
The prospect of supply disruptions should Israel launch a counterstrike on the Lebanon-based are expected to add upward pressures to crude prices over the coming days.
Brent crude contracts for September delivery, the global benchmark, were last marked 4 cents lower at $81.09 per barrel while WTI contracts for the same month slipped 8 cents to $77.08 per barrel.
More Wall Street Analysts:
- Analyst revisits Nvidia stock price target after Blackwell checks
- Analysts prescribe new Walgreens stock price targets after earnings
- Analyst revises Facebook parent stock price target in AI arms race
In overseas markets, Europe's Stoxx 600 was marked 0.52% higher in early Frankfurt trading ahead of a key week that includes GDP data and a host of top tier earnings, while Britain's FTSE 100 rose 0.92% with Thursday's Bank of England rate decision in focus.
Overnight in Asia, the Nikkei 225 rebounded with a 2.13% gain ahead of a key Bank of Japan rate decision on Wednesday, while the region-wide MSCI ex-Japan benchmark rose 0.72% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
