Traders work on the floor of the New York Stock Exchange (NYSE) in New York City.
Jeenah Moon | Reuters
The S&P 500 was little changed on Monday after the major averages posted a winning week and as investors looked ahead to a busy week of earnings results and inflation data.
The broad market index traded around the flatline, while the Dow Jones Industrial Average outperformed, trading up 114 points, or about 0.2%. The Nasdaq Composite, however, was down 0.2%.
The Nasdaq was weighed down by a 4% drop in shares of Micron Technology. The move came as investors assessed increasing competition from China’s CXMT, which reported progress on a new chip structure. In contrast, the Dow was boosted by a 2% rise in Salesforce shares after the name received a double upgrade at Bank of America.
Meanwhile, oil prices rose after President Donald Trump announced an “energy ceasefire” between Russia and Ukraine over the weekend, then Ukrainian President Volodymyr Zelenskyy said Moscow had already violated it. West Texas Intermediate futures advanced 2% to around $93 per barrel. Brent crude gained 2% to trade at $106 per barrel.
Trump also told reporters he was considering joining Saudi Arabia in its fight against Tehran-backed Houthis in Yemen after another deadly attack on Riyadh’s international airport. The remarks raised the prospect of escalating tensions in the region.
Wall Street is coming off a winning week for the major averages, as a rally in tech stocks helped investors shrug off higher oil prices and yields. The Dow and S&P 500 each posted their second positive week in three, while the Nasdaq netted its fourth straight week of gains.
Investors hope the third-quarter earnings season will help stocks power through the Middle East turmoil. By all estimations, the incoming results are expected to be strong. According to FactSet’s John Butters, the S&P 500 is set to post 29.6% earnings growth in the quarter. That would be the fourth straight quarter that the broader index posts above-25% earnings growth, thanks to the strength of the AI data center buildout.
But it’s what managers say that will matter more to investors, given the uncertainty around how businesses and their customers are contending with higher fuel and borrowing costs.
“Investors have kind of narrowed in on some of the important aspects,” said Brian Leonard, portfolio manager of Keeley Gabelli Small Cap Dividend Fund (KSDIX). “Can this company withstand what’s happening? Pass along, continue to grow margins, and the future is going to be better than the most recent past.”
The reporting season will ramp up in earnest this week with the big banks, with Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo all expected to post results this week.
Key inflation data is due out this week as well, with the September consumer and producer price indexes due out Wednesday and Thursday, respectively.
This week also marks four years since the start of the S&P 500’s bull run after the index notched a closing low of 3,577.03 in October 2022. Since then, the index has more than doubled.
— CNBC’s Terri Cullen contributed to this report.
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