Dow and S&P 500 hit new highs ahead of big bank earnings
All three major stock indexes closed at new highs on Monday as Wall Street rallied around the outlook for economic growth and braced for a volatile week marked by big bank results from Tuesday and key inflation data.
Adding to a Friday high, the Dow Jones, which is made up of 30 historic companies like Disney and Goldman Sachs, jumped 126 points, or 0.4%, to 34,996 on Monday, pushing gains to nearly 16 % this year only.
Also catching new records, the S&P 500 jumped 0.4% to 4,385 points, and the tech-rich Nasdaq climbed 0.2%; they are now up 18.5% and 16% this year, respectively.
Ahead of their results this week, big banks Morgan Stanley, Goldman Sachs and JPMorgan were among the stocks leading the S&P gains, climbing 3%, 2.5% and 2%.
Disney shares, meanwhile, outperformed all other Dow Jones stocks, climbing more than 4% after the company’s spy thriller. Black Widow set a pandemic record with movie revenues of $ 80 million and streaming revenues of $ 60 million over the weekend.
What to watch out for
If corporate profits keep their first quarter momentum. “We ran out of superlatives to describe the astonishing performance of US companies during the first quarter earnings season,” LPL Financial wrote in a note on Monday, citing earnings that exceeded expectations elevated by one of the most important margins in history. The company expects “more good news this quarter as the economy has opened up more”, but also acknowledges that the second quarter “will almost certainly be the peak of earnings growth for this cycle.”
In addition to the multitude of corporate profits, the monthly Bureau of Labor Statistics Consumer Price Index report is also scheduled for Tuesday morning. Economists predict that inflation, which peaked in 13 years during the pandemic, rose 0.5% in June after climbing 0.6% in May.
Buoyed by optimism in the face of a declining pandemic, energy and financial stocks dominated the market early this year, but tech stocks also rebounded after underperforming this spring amid the threat of rising prices. interest rate. These fears caused the stock market to rotate from growth stocks (like tech stocks) to cyclical and value-driven tranches that struggled during the pandemic (like energy and financials). In recent weeks, however, Federal Reserve officials have appeased the make it clear the Fed is not looking to raise rates anytime soon.
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