The benchmark S&P 500 scaled a fresh record high on Monday, extending a bull-market run into a new week on a boost from some megacap and chip stocks, while corporate earnings and clues on interest-rate cuts continued to top investors’ radar.
The S&P 500 surpassed Friday’s record level and hit an intraday high of 4,868.41 points, confirming a bull market after closing at an all-time high in the previous session since its October 2022 closing low.
Megacaps such as Alphabet, Meta Platforms and Apple added between 0.5% and 1.1%, while chip stocks Nvidia, Broadcom and Micron Technology advanced between 0.6% and 2%, taking the Philadelphia SE Semiconductor index up by 0.2% to a new all-time intraday high.
“We’re going to see a fair amount of volatility ... any economic slowdown may put a cap on the markets and with inflation still being an issue, you may also see the Fed standing pat a lot longer than the markets think,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.
Wall Street had stalled at the start of 2024 after the prior year’s stellar run, as investors reassessed a quicker start to interest-rate cuts in light of mixed economic data and Federal Reserve policymakers playing down such bets.
Traders have sharply scaled back their expectations of an at least 25-basis-point rate cut first arriving in March, with focus now more on May with a 53% chance, according to the CME Group’s FedWatch Tool.
Investors will parse the personal consumption expenditure (PCE) index - the Fed’s preferred inflation gauge, S&P Global PMI readings and an advance fourth-quarter GDP print this week to assess the central bank’s next policy decision when it meets on Jan. 31.
Big-ticket earnings this week from Netflix, Tesla, Abbott Laboratories, Intel and Johnson & Johnson, among others, will also be watched for insights into the health of corporate America.
United Airlines Holdings, Brown & Brown and Zions Bancorp are set to detail earnings after market close.
So far, 84.6% of the S&P 500 companies that have reported results have surpassed earnings expectations, LSEG data showed on Friday, compared with the 93.1% beat seen in the previous week.
At 11:51 a.m. ET, the Dow Jones Industrial Average was up 120.08 points, or 0.32%, at 37,983.88, the S&P 500 was up 12.98 points, or 0.27%, at 4,852.79, and the Nasdaq Composite was up 67.29 points, or 0.44%, at 15,378.26.
Meanwhile, utilities fell 0.9% to lead declines among the major S&P 500 sectors.
The consumer staples index slipped 0.4% as Archer-Daniels-Midland slumped 22% after placing its CFO on administrative leave for an investigation and cutting its full-year profit forecast.
Gilead lost 10.2% after its cancer drug missed main goal in late-stage study.
Renewable energy firm SolarEdge gained 2.7% on plans to lay off about 16% of its global workforce.
Advancing issues outnumbered decliners by a 3.16-to-1 ratio on the NYSE and by a 2.31-to-1 ratio on the Nasdaq.
The S&P index recorded 79 new 52-week highs and three new lows, while the Nasdaq recorded 144 new highs and 97 new lows.
Strategists at the Wells Fargo Investment Institute (WFII) this week upgraded their rating on the energy sector to “favorable” from “neutral,” saying “oil prices will bottom with the global economy and then finish the year higher.”
A potential rise in Middle East tensions and any OPEC actions on production are factors that could influence near-term oil prices.
Prices for U.S. crude jumped as much as 4.5% on Friday before settling up 0.9%, after several oil tankers diverted course from the Red Sea following overnight air and sea strikes by the United States and Britain on Houthi targets in Yemen. The energy sector ended up 1.3% on the day.