Market rallies with major earnings ahead; Nvidia and Arm Holdings make strong gains as oil prices drop
Stocks soared on Monday, recovering from a challenging week as tech shares rebounded and Middle East tensions eased, according to CNBC.
Traders also anticipated the upcoming release of major earnings reports.
The Dow Jones Industrial Average surged 253.58 points, or 0.67 percent, to close at 38,239.98. The S&P 500 increased by 0.87 percent to end the session at 5,010.60, while the Nasdaq Composite rose by 1.11 percent to 15,451.31, both indices breaking a six-day losing streak.
Nvidia, known for chipmaking and artificial intelligence, saw a significant rebound of 4.4 percent following a nearly 14 percent drop last week, its worst performance since September 2022. Arm Holdings also experienced a strong recovery, gaining nearly 7 percent on Monday.
In the commodities market, US crude prices fell after Iran announced it would not escalate its conflict with Israel, easing investors' concerns that higher oil prices might fuel inflation and deter the Federal Reserve from cutting interest rates.
Thierry Wizman, a global FX and rates strategist at Macquarie, attributed the improved market sentiment to the decline in gold and oil prices and the stability of the USD. He noted that fears of a regional war in the Middle East subsiding also contributed to higher US bond yields on the day.
Looking ahead, major companies such as Tesla, Meta Platforms, American Airlines, Microsoft, and Alphabet are scheduled to release their earnings this week.
Chris Fasciano, a portfolio manager at Commonwealth Financial Network, mentioned that these earnings reports will likely dictate whether the tech sell-off will end or continue, and whether investors will start to differentiate between the growth outlooks of these high-profile companies.
Additionally, significant economic indicators are set to be released later in the week, with GDP figures expected on Thursday and a key inflation reading, the personal consumption expenditures price index for March, due on Friday. This index is the Fed’s preferred inflation gauge.
The Federal Reserve is scheduled to meet again from April 30 to May 1, currently observing a quiet period ahead of the meeting. An earlier version of this report inaccurately stated the reporting schedule for Apple’s earnings.
On the day, the broader market performance saw all 11 sectors of the S&P 500 trading higher, led by financials and information technology sectors, with significant gains. Notably, Nvidia's rally was among the largest in the tech sector.
Meanwhile, the materials sector, though the smallest gainer, still saw an increase of about 0.5 percent.
