Wall Street surges on tech stocks, earnings-heavy week.
Wall Street surged on Monday, with all three major stock indexes extending Friday’s rally. The tech-heavy Nasdaq was out front, boosted by a 4.9% jump in semiconductor shares. Investors are all but certain the Federal Reserve implement a bite-sized interest rate hike next week even as the U.S. central bank remains committed to taming the hottest inflationary cycle in decades.
The Dow Jones Industrial Average rose 328.17 points, or 0.98%, to 33,703.66, the S&P 500 gained 55.93 points, or 1.41%, to 4,028.54 and the Nasdaq Composite added 232.84 points, or 2.09%, to 11,373.28. All 11 major sectors in the S&P 500 were higher, with tech up the most, jumping 2.8%.
Fourth-quarter reporting season has shifted into overdrive, with 57 of the companies in the S&P 500 having posted results. Of those, 63% have delivered better than expected earnings, according to Refinitiv. Analysts now see S&P 500 fourth quarter earnings, on aggregate, dropping 3% year-on-year, nearly twice as steep as the 1.6% annual drop seen at the beginning of the year, per Refinitiv.
The session marks a calm before the storm in a week jam-packed with high profile earnings reports and back-end loaded with crucial economic data. On the economic front, the Commerce Department is expected to unveil its initial “advance” take on fourth-quarter GDP in Thursday, which analysts expect to land at 2.5%. On Friday, the wide-ranging personal consumption expenditures (PCE) report is due to shed light on consumer spending, income growth, and crucially, inflation.
Activist investor Elliott Management took a multi-billion dollar stake in Salesforce, while Tesla’s Chief Executive Elon Musk took the stand in his fraud trial related to a tweet saying he had backing to take the electric automaker private. Baker Hughes missed quarterly profit estimates due to inflation pressures and ongoing disruptions due to Russia’s war on Ukraine. Spotify Technology announced impending job cuts, shedding 6% of its workforce.