All three major averages clinched record highs Monday after cutting intraday losses ahead quarterly earnings from big tech and further clues on monetary the Federal Reserve due this week.
The S&P 500 rose 0.24%, to close at a record high of 4,422. The Dow Jones Industrial Average gained 0.24%, or 82 points to close a record of 35,144.12. The Nasdaq closed at record of 14,840.70.
Large cap tech stocks were mostly positive as investors piled into the sector, which has gained about 14% since its May slump, ahead of quarterly results from the Fab 5 due this week. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) report quarterly results on Tuesday, while Facebook (NASDAQ:FB) and Amazon.com (NASDAQ:AMZN) deliver results on Wednesday and Thursday respectively.
The broader market was lifted by a climb in energy stocks as oil prices recovered some losses from the lows of the day.
Oil prices were steady on Monday as the spread of the Covid-19 Delta variant stoked fears over future fuel demand, though crude supply looks set to be tight through the rest of the year.
As well as earnings, the Federal Reserve’s monetary policy decision and commentary from Fed chairman Jerome Powell are also likely to drive market action later this week.
“[T]he Fed is scheduled to meet, releasing its latest policy decision on Wednesday. Rates are largely expected to remain unchanged at 0.00%-0.025%. The Committee’s asset purchase program is also expected to remain steady at $120 billion. The highlights, therefore, will come from the statement as well as the press conference,” Stifel said in a note.
With stocks hovering at record highs, some on Wall Street see wild swings coming for the broader market, but ultimately continue to back the bull market.
“Higher inflation, rising interest rates, and a less accommodative Federal Reserve could lead to short-term market volatility, but we expect the bull market to remain intact,” Wells Fargo (NYSE:WFC) said in a note.
Wall Street had started the session on the back foot as fears sentiment was soured by a further regulatory crackdown from China on companies in the mainland. Beijing introduced new rules over the weekend taking aim at the education sector, prohibiting them from turning a profit or raising capital on stock markets.
In other news, crypto-related stocks including Marathon Digital (NASDAQ:MARA), Riot Blockchain (NASDAQ:RIOT), MicroStrategy (NASDAQ:MSTR) and Square were boosted by surge in bitcoin. The sharp uptick in bitcoin was attributed to short-covering amid speculation that Amazon.com is set to make a foray into the crypto industry.