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S&P 500 Hovers at Record Highs Ahead of Tech Earnings, Fed

Stock MarketsJul 26, 2021 03:02PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 hovered at record highs Monday, ahead of a busy week of earnings from big tech and a monetary policy update from the Federal Reserve due later this week.

The S&P 500 rose 0.2%, after hitting a record high of 4,420.70. The Dow Jones Industrial Average gained 0.2%, or 63 points, though had notched a intraday record of 35,135.97. The Nasdaq also remained close to its record high of 14,863.6.

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.

Tesla (NASDAQ:TSLA), up more than 2%, is set to report second-quarter results after the closing bell on Monday. Earlier this month, the company said it produced and delivered over 200,000 vehicles for the quarter.  

Ahead of the report, Tesla shares have underperformed, weighed down by a myriad of headwinds including “increasing EV competition, China PR/safety issues negatively impacting demand, and the chip shortage overhang,” Wedbush said. Tesla, however, still notched 200,000 deliveries in the June quarter and appears to “be on a trajectory to possibly hit 900k for the year with a stronger 2H on the horizon in our opinion.” 

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 backfoot 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), and MicroStrategy (NASDAQ:MSTR) 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.

S&P 500 Hovers at Record Highs Ahead of Tech Earnings, Fed
 

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Comments (7)
stu spice
stu spice Jul 26, 2021 4:25PM ET
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Stocks continue to rise because of the inflationary effect of printing money. They're technically under-priced. If I'm a baker, why would I want to continue to sell my bread for 1 dollar a loaf when I know there's double as much money been printed out there. Either I have to double my price or accept that my 1 dollar loaf is only worth 50 cent. It's all a question of relativity.
Bill Ackman
Bill Ackman Jul 26, 2021 4:03PM ET
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Just send it to 50K dow,10K sp lol why do they have to stop start :D :D
Jay Jung
Jay Jung Jul 26, 2021 3:59PM ET
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Xijinping is a liar and devil.
Jay Jung
Jay Jung Jul 26, 2021 3:59PM ET
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6300 Chinese died under the tunnel due to flood. CCP said only 4 people dead.
Mitchel Pioneer
Mitchel Pioneer Jul 26, 2021 3:29PM ET
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The 11AM miracle "rally" criminally unfolds in broad daylight, as more manufactured "gains" are shoved down the throat of the US Ponzi Scheme, greatest financial fraud in history, and biggest investment JOKE in the world.  Single day loss followed by 5 days of "gains," including the miraculous reversal of one loss after another.  Assume the proper position America.
Ricardo Diogo
Rcd72 Jul 26, 2021 3:20PM ET
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fed Will destroy the economy with its sky high inflation.the transitory *****talk is ridiculous
Lex Wild
Lex Wild Jul 26, 2021 3:05PM ET
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Hours before Oh My God Covid, China and so on we will all die and now ATHs i'm lovin it ;-)
 
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