The S&P 500 and Nasdaq Composite indices achieved record high closes on Monday, buoyed by strong performances from major technology companies, particularly Alphabet. This surge in market sentiment comes as investors eagerly await upcoming earnings reports and speculate on potential trade agreements aimed at mitigating the economic impact of tariffs imposed by the Trump administration.
Alphabet, the parent company of Google, rose by 2.7 percent in anticipation of its quarterly earnings report scheduled for Wednesday. This report, alongside that of Tesla, marks the beginning of earnings season for the so-called “Magnificent Seven” tech giants. Their results are expected to influence the performance of other significant companies due to report in the coming days. In contrast, Tesla’s stock dipped slightly by 0.35 percent, while Apple and Amazon saw gains of 0.62 percent and 1.43 percent, respectively, contributing to the overall upward trend of the indices.
Verizon also made headlines, climbing more than 4 percent after the telecommunications company raised its annual profit forecast, reflecting positive investor sentiment. Analysts predict that S&P 500 companies will report a 6.7 percent increase in earnings for the second quarter, with technology firms driving much of this growth, according to data from LSEG I/B/E/S.
Investment strategist Tom Hainlin from US Bank Wealth Management noted, “So far, companies that have reported have, in general, met or beat guidance from the prior quarter. We haven’t seen any degradation either in corporate profits or consumer spending.”
As the deadline for potential tariffs on imports approaches on August 1, the S&P 500 is up approximately 8 percent year-to-date, suggesting that investors believe the economic repercussions of these tariffs may be less severe than initially feared. US Commerce Secretary Howard Lutnick expressed confidence on Sunday that a trade deal with the European Union could be secured, even as EU nations consider countermeasures in response to the tariffs. President Trump has threatened tariffs ranging from 20 percent to 50 percent on various imports, including a potential 30 percent tariff on goods from Mexico and the EU.
On Monday, the S&P 500 increased by 0.14 percent, closing at 6,305.60 points. The Nasdaq rose 0.38 percent to finish at 20,974.18 points, while the Dow Jones Industrial Average saw a slight decline of 0.04 percent, closing at 44,323.07 points. Among the 11 sector indexes within the S&P 500, seven recorded gains, led by communication services with a notable increase of 1.9 percent and consumer discretionary climbing by 0.6 percent.
Trading volumes were robust, with 19.7 billion shares exchanged on US exchanges, outpacing the average of 17.7 billion shares over the previous 20 sessions. The S&P 500 has gained about 7 percent this year, with the Nasdaq experiencing an increase of nearly 9 percent.
As investors remain focused on the effects of tariff uncertainties on the US economy, they will pay close attention to upcoming jobless claims data and the July business activity report expected on Thursday. Additionally, a speech by Federal Reserve Chair Jerome Powell on Tuesday will be scrutinized for insights regarding potential interest rate cuts, particularly following mixed inflation signals reported last week. Current market sentiment suggests that traders have largely dismissed the possibility of a rate cut in July, with over 50 percent anticipating a cut by the September meeting, according to the CME Group’s FedWatch tool.
While declining stocks outnumbered those that rose within the S&P 500 by a ratio of 1.7-to-one, the overall market momentum remains strong. The S&P 500 recorded 17 new highs and 9 new lows, while the Nasdaq logged 97 new highs against 56 new lows, illustrating a mixed but generally positive outlook for the market.
