The S&P 500 edged up 4.44 points, or 0.1%, to 5,463.54, shaking off its first consecutive weekly decline since April. The Dow Jones Industrial Average fell 49.41 points, or 0.1%, to 40,539.93 points; the Nasdaq rose 12.32 points, or 0.1%, to 17,370.20 points.
ON Semiconductor led the market with an 11.5% gain after suppliers to the automotive and other industries reported spring profits that beat analysts’ expectations. McDonald’s shares rose 3.7% despite lower-than-expected profits and revenue in its latest quarter. Analysts say the company’s performance at U.S. restaurants isn’t as bad as some investors feared.
They helped offset declines in oil and gas companies, which are among the heaviest weights in the market after oil prices fell back to levels last seen two months ago. ConocoPhillips fell 1.6% and Exxon Mobil fell 1% on concerns about how much crude China’s faltering economy will consume.
Several big names on Wall Street will report their results later this week: Microsoft on Tuesday, Meta Platforms on Wednesday, Apple and Amazon on Thursday. Their stock movements have extra leverage on Wall Street because they are among the stocks with the largest total value on the market.
Such big tech stocks have driven the S&P 500 to dozens of new highs this year, driven in part by investor enthusiasm for artificial intelligence technology, but amid criticism that they have become too expensive and as alternatives begin to search for alternatives. Technology stocks have lost steam this month. Investors found earnings reports from Tesla and Alphabet impressive last week, raising concerns that the rest of the so-called “Big Seven” tech giant stocks may also fail to impress. .
Bank of America strategists led by Savita Subramanian said that “the era of artificial intelligence hype is over.” “It’s time to demonstrate monetization.”
While these big tech giants weakened, helping support U.S. stocks was strength in other areas that have been hit by high interest rates aimed at controlling inflation. Small stocks in particular have soared on expectations that slowing inflation will prompt the Federal Reserve to start cutting interest rates soon.
That pattern eased on Monday, with most large-cap tech stocks rising while smaller stocks in the Russell 2000 fell 1.1%. But so far, the Russell 2000 index is still up 9.2% this month, leading the market in gains.
The Federal Reserve will hold its latest interest rate policy meeting this week and will issue an announcement on Wednesday. Few expect action by then, but it is widely expected to start easing policy at its next meeting in September.
In the bond market, bond yields have been relatively stable, with the 10-year bond yield falling to 4.17% from 4.19% late on Friday. It was as high as 4.70% in April.
In overseas stock markets, Japan’s Nikkei 225 Index rose 2.1%. Its central bank will also announce an interest rate decision this week. People expect it to raise interest rates.
Official data on Saturday showed industrial profits rose 3.5% annually in the first half of 2024, with Hong Kong’s index up 1.3% and Shanghai’s index little changed. This is a glimmer of positive news following recent interest rate cuts and other sporadic stimulus measures following a high-level policy meeting held by the ruling Communist Party earlier this month.
London’s FTSE 100 edged up 0.1% ahead of this week’s Bank of England meeting, where some investors expect a rate cut.
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