In the early morning of the 23rd, Beijing time, U.S. stocks rose slightly at midday on Monday, and the Nasdaq and S&P 500 were expected to end their six-day losing streak. This week, the market focused on a number of important earnings reports, including Tesla and Microsoft. The Fed's most important inflation indicator, the PCE price index for March, will be released on Friday.
The Dow rose 106.23 points, or 0.28 percent, to 38,092.63, the Nasdaq added 79.51 points, or 0.52 percent, to 15,361.52 and the S&P 500 added 21.36 points, or 0.43 percent, to 4,988.59.
Both the S&P 500 and the Nasdaq recorded six consecutive days of declines last week, bringing their weekly losses to 3.05% and 5.52%, respectively. On Friday alone, the Nasdaq fell 2%, and chip giant Nvidia fell 10%, dragging big tech companies down broadly.
Rick Bensignor, institutional analyst at Bensignor Investment Strategy, said: "The sharp decline in the S&P 500 and Nasdaq last week shows that investors are finally realizing that their long-held promise to 'maintain a higher interest rate environment for longer' has become a reality. ”
By Friday's close, the S&P 500 had fallen for the third consecutive week, and the Nasdaq had fallen for the fourth consecutive week.
The Dow's exposure to technology stocks is lower than that of the S&P and Nasdaq, which were largely flat last week.
This week, investors will usher in a number of important earnings reports, including the Big Seven of technology stocks.
Tesla, Meta Platforms, American Airlines, Microsoft, and Google's parent company Alphabet are all set to report earnings this week: Tesla will release earnings after the market opens on Tuesday, Facebook's parent Meta Platforms on Wednesday, and Apple, Intel, and Microsoft on Thursday.
According to a survey of 409 respondents, nearly two-thirds expect earnings reports to boost U.S. stocks, the highest since October 2022.
U.S. equities had a rough start to the second quarter. Since April, the performance of the three major stock indexes has been sluggish, mainly due to recent inflation data showing that inflationary pressures remain high, prompting market participants to downgrade their expectations for the Federal Reserve to cut interest rates multiple times in 2024.
Wall Street economists and strategists currently believe that the Fed will not cut interest rates until at least September, and a growing number of market participants even believe that the Fed may not cut rates at all this year.
There are also some important economic data in the second half of the week, including Thursday's GDP data and Friday's personal consumption expenditures price index (PCE) for March. The U.S. Department of Commerce will release important PCE inflation data on Friday, which is the Fed's preferred inflation gauge.
After Fed Chair Jerome Powell signaled last week that he was not in a hurry to raise interest rates, US Treasuries tumbled, with the two-year Treasury yield briefly breaking the 5% mark.
The Federal Reserve will hold its monetary policy meeting from April 30 to May 1, and Fed officials have entered a period of silence before the meeting.
Stocks in focus
UBS downgraded Apple, Amazon, Google, Meta, Microsoft and Nvidia to neutral from overweight. Most of these companies will report earnings this week.
Nvidia is in the spotlight. After the stock fell 10% on Friday, some brokerages believe that it will still return to the upward channel after a short-term correction. There were also reports that Nvidia executives met with Vietnamese ministers on Monday to discuss cooperation.
On April 22, Tesla celebrated the 10th anniversary of the delivery of the first Model S in Chinese mainland. According to reports, the number of Tesla's car owners in the Chinese market has increased from 15 when it first entered the market in 2014 to more than 1.7 million at present.
Tesla has recommended that shareholders vote to reinstate CEO Elon Musk's tens of billions of dollars compensation package at its annual meeting in June, and industry experts believe that Tesla could be embroiled in new legal battles regardless of the outcome.
Dan Ives, an analyst at Wedbush Securities, warned that it would be an "epic" disaster if Tesla abandoned its affordable electric car program. He said Tesla's move would be a gamble that could decide the EV maker's fate for years to come.
Elon Musk, Tesla's CEO and billionaire, promised in 2019 that there would be a fleet of robo-taxis on the road by 2020. But this promise has not yet been fulfilled, and the system still needs to be overseen by humans. Tesla Inc. announced on Saturday that it would cut the price of its Full Self Driving system by a third to $8,000. Prior to this, the company also slashed the prices of three of its five models sold in the United States by $2,000. Analysts believe the price cut is the latest evidence of the challenges facing the EV maker.
On Monday, well-known technology journalist Mark Gurman broke the news that Apple is developing a large language model (LLM) that runs on the device side, which will prioritize response speed and privacy protection.
Google's parent company, Alphabet, will report its financial results for the first quarter of 2024 after U.S. stock market hours on Thursday. Wall Street analysts expect Alphabet's first-quarter revenue to reach $78.79 billion, up 13% from $69.79 billion a year ago, net income to $18.89 billion, up 26% from $15.05 billion a year ago, and earnings per share to be $1.51, up $1.17 a year ago.
Meta Platforms recently released two open-source Llama38B and Llama370B models for free use by external developers. Meta said that Llama38B and Llama370B are the best performing open source models of the same volume. Llama 3 is reportedly an upgrade to Meta's AI model released last summer and is its latest effort to keep up with similar technology from companies like OpenAI and Alphabet's Google.
Arm Holdings is said to be developing its integrated circuit business in Malaysia.
Ericsson confirmed the layoffs in China and said it would never exit the Chinese market.
Nokia Fortune Industries denied that the company had cut its orders.
Virgin Galactic has announced that it is considering a reverse stock split.
In other markets, major European stock indexes closed higher on Monday, with Britain's FTSE 100 up 1.68% to a record closing high, Germany's DAX 30 up 0.65%, France's stock index up 0.24%, and Euro Stoxx 50 up 0.39%.