US stock indexes struggled for direction on Monday, hovering near records, as investors awaited earnings from heavyweights, including major tech companies this week and the Federal Reserve policy meeting.
Analysts said the earnings pipeline could set the tone, but investors will also focus on China and the United States, as tensions rise between the world’s two largest economies.
- The Dow Jones Industrial Average rose 21 points, or 0.1%, near 35.081 after flipping between small gains and losses.
- The S&P 500 rose three points, or 0.1%, to 4,415.
- The Nasdaq Composite Index fell 13 points, or 0.1%, to 14,824 points.
The decline came after a week that saw US benchmarks rebound sharply from their July 19 plunge to finish Friday at record levels. Friday’s S&P 500 rose 2% to end at the record 40 close of 2021, and the heavy Nasdaq Composite Index rose 2.8%. It also pushed the Dow to a record high at the close on Friday, finishing above 35,000 points for the first time.
What is driving the market?
US stocks struggled for direction on Monday, following a softer tone across global stock markets, as investors waited to hear C-groups of major tech companies about their outlook for the rest of 2021.
“It’s all about earnings this week,” said John Carey, director of equity income at Amundi US, adding that investors will stick to what company executives have to say about their outlook for the second half of this year.
“I think investors will also be aware of anything management has to say about inflation, cost pressures, and margin expectations, as a result of potentially higher labor costs and other inputs,” he told MarketWatch.
Results are due this week from major tech companies including Alphabet Inc. Amazon.com Inc. Apple company Facebook Inc And Microsoft Corporation.
“Earnings season is now at the peak of throttling, and so far remains a surprise to the upside, with most companies reporting better-than-expected results,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a note. .
He said, “Despite the ‘fear factor’ of the virus, and perpetual inflation that can sometimes cause minor issues, we are seeing continued upside in the summer with indicators likely to rise by another 5%.
Earnings preview: Apple, Microsoft, Google, Facebook, Amazon and Tesla lead the biggest week in earnings
The US earnings calendar also includes the electric car maker Tesla Corporation Which reports after closing on Monday. This week will also see the Fed’s latest rate decision and Q2 GDP report.
do not miss: Stagflation is a “legitimate risk” that would be painful for US markets
The Federal Reserve meets on Tuesday and Wednesday. Policy makers are expected to discuss plans to slow the pace of the Fed’s monthly bond purchases. But economists said investors who expect clear answers to crucial questions about when tapering will start and the pace of any downturn are likely to be disappointed.
be seen: Feeding on tiptoe about decreasing this week
Global stocks in Europe and the UK closed slightly lower, while the Hang Seng fell more than 4%, after a crackdown by China on both Tencent’s music licensing and the entire educational teaching industry. Shares of Tencent Music Entertainment fell about 4.5% after falling as much as 14% in pre-market activity.
US government data on Monday showed US new home sales fell 6.6% in June to an annual rate of 676,000, the lowest level since the first month of the COVID-19 pandemic in early 2020, as high prices and limited selection appeared to frustrate buyers .
Read also: Goldman Sachs cut US growth forecasts due to weak services sector
What companies are focused on?
- shares Hasbro It rose 12.9% after the game maker reported revised second-quarter earnings that were more than double what had been expected, with revenue rising through the strength of franchise brands, Wizards of the Coast and digital games.
- Aon PLC And Willis Towers Watson PLC On Monday, he announced a mutual agreement to end the $30 billion merger deal and end litigation with the US Department of Justice. Aon shares are up 10%, while Willis Towers Watson is down 8.1%.
- Popular stock meme AMC Entertainment Holdings Inc. It rose 7%, on its way to halting a three-day losing streak, while GameStop Corp. It rose 0.2%.
- Otis Worldwide Corp. Shares rose 0.7% after the elevator and escalator company reported second-quarter earnings and sales that rose above expectations, with particular strength in the new equipment business, while also raising its full-year outlook.
- Lockheed Martin Corporation. Shares fell 3.2% after the aerospace and defense contractor reported second-quarter earnings that came in shy of expectations, amid performance problems in the aviation business, even though revenue beat expectations.
What are other markets doing?
- Bitcoin BTCUSD jumped 20.1% Monday after Amazon launched an ad looking for an individual to lead the retailer’s crypto efforts. A separate report stated that Amazon was looking to start accepting bitcoin for payment by the end of the year.
- The yield on the 10-year Treasury was flat at 1.28%. Yields and bond prices move in opposite directions.
- The ICE US dollar index, a measure of the currency against a basket of six major competitors, fell 0.4%.
- Oil futures were trading lower, with the US benchmark down 0.5%, while gold futures were down 0.5%.
- In European stocks, the Stoxx Europe 600 closed 0.1% lower, while the FTSE 100 in London closed almost flat.
Stephen Goldstein contributed reporting