NEW YORK: US stocks advanced on Monday (Jan 29) as market participants looked ahead to this week’s slew of megacap earnings, economic data and the Federal Reserve’s (Fed) monetary policy meeting.
All three major US stock indices advanced, with the tech-laden Nasdaq enjoying the largest percentage gain.
The Dow Jones Industrial Average rose 224.02 points, or 0.59%, to 38,333.45. The S&P 500 gained 36.96 points, or 0.76%, at 4,927.93 and the Nasdaq Composite advanced 172.68 points, or 1.12%, to 15,628.04.
The S&P 500 notched yet another record closing high.
With the bellwether index up 3.3% so far in the first month of 2024, BlackRock raised its overall US stocks view to “overweight” from “neutral”.
“Today is the calm before the storm,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “This is a truly headline-driven week, with earnings, the Fed, the jobs report and ongoing geopolitical uncertainties.”
He added: “So with stocks at all time high, if we see any disappointments that could upset the apple cart and cause some well-deserved volatility.”
A spate of earnings from high profile tech and tech-adjacent momentum stocks waits in the wings, starting on Tuesday with Alphabet Inc and Microsoft Corp, Qualcomm Inc and Wednesday and culminating on Thursday with Apple Inc, Amazon.com and Meta Platforms Inc .Other closely watched results include General Motors Inc on Tuesday, Boeing Co on Thursday, with oil supermajors ExxonMobil Corp and Chevron Corp wrapping up the week on Friday.
The Federal Open Markets Committee is scheduled to convene on Tuesday for its two-day monetary policy meeting, at which its voting members are widely expected to leave the key Fed funds target rate unchanged at 5.25% to 5.50%.
“Powell is probably going to be somewhat cautious. The Fed doesn’t want to be burned by inflation, and will push back on the (expected) March cut as a near certainty,” Detrick said.
Fed chair Jerome Powell and other policymakers have warned not to expect interest rate cuts before inflation cools down to its average 2% annual target, but have also vowed to remain agile as they respond to economic data.
This week’s roster of economic reports includes the labour market, with the Job Openings and Labor Turnover Survey, ADP, fourth-quarter employment costs, productivity, and planned layoffs, and the January employment report on Friday.
Case-Shiller home prices, consumer confidence, the Institute for Supply Management’s purchasing managers’ index, construction spending and factory orders are also on deck.
Robust economic data of late – particularly last week’s strong gross domestic product and personal consumption expenditures data – have simultaneously calmed fears of imminent recession and tossed cold water on hopes that the Fed would begin cutting interest rates as soon as March.
Ten of the 11 S&P 500 sector indices rose, led by consumer discretionary, up 1.37%, followed by a 0.97% gain in information technology.
Energy sector was the sole declining sector.
Tesla Inc surged 4.2% after the electric-car maker revealed capex plans.
Robot vacuum maker iRobot slid 8.8% as the company and Amazon scrapped merger plans in the face of opposition from EU antitrust regulators.
Meta Platforms rose 1.7% after brokerage Jefferies raised its target price on the stock to US$455 from US$425.
Warner Bros Discovery lost 1.2% as brokerage Wells Fargo downgraded the streaming platform to “equal weight” from “overweight”. – Reuters