US stocks opened higher on Monday, rebounding from their worst week of the year, with the S&P 500 index turning optimistic as investors braced for a deluge of corporate earnings.
The S&P 500 (^GSPC) rose 0.5% to rise back above 5,000, after closing below a key level on Friday for the first time since February amid a six-day losing streak. The Dow Jones Industrial Average (^DJI) rose 0.5%, while the Nasdaq Composite (^IXIC) rose 0.6%.
After the recent blow it suffered, the market's rally has fallen to its most fragile point in months, and this week will be crucial to determine whether the malaise will continue.
Technology stocks are looking to rebound after lackluster earnings from Netflix (NFLX) dragged down a broader market already grappling with geopolitical tensions. Fading opportunities for interest rate cuts have increased doubts that major companies can continue to carry out the gains.
Hopes now rest on big tech earnings later in the week to reassure and reignite the market. On deck are quarterly reports from Meta (META), Microsoft (MSFT), and Alphabet (GOOG). On Monday, Verizon (VZ) is the highlight as the market prepares for a slew of reports, with 178 S&P 500 companies alone due to release in the coming days.
But the focus on Monday is on Tesla Inc (TSLA) on the eve of its results, as the electric car maker said it had cut prices in the US, China and several other countries. The Elon Musk-led company has already spooked some investors with its push for robotaxis and its decision to have shareholders vote again on Musk's rejected pay package. Shares fell more than 3% on Monday.
Meanwhile, debate continued over the Federal Reserve's stance on interest rate cuts, after Chairman Jerome Powell and fellow policymakers became more hawkish last week in the face of persistent inflation. Given that, minds are already turning to Friday's release of the personal consumption expenditures index — the Fed's preferred measure of inflation — as crucial to assessing whether interest rates will stay higher for longer.
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