Stocks were up Monday after the announcement that President Biden was not looking for a second term. What’s in store for the remaining of the week?
Stocks were rising on Monday, as all of the main stock market indexes were up, fueled partially by the announcement that President Joe Biden wouldn’t seek a second term. It marks the beginning of an enormous week for stocks, as second quarter earnings season moves full steam ahead and a key inflation report comes out Friday.
The Biden announcement looked as if it would breathe recent life into Democrats, and the stock markets, as Biden’s likely alternative at the highest of the ticket, Vice President Kamala Harris, is viewed as having a greater opportunity to win than Biden, a minimum of based on early odds.
Technology stocks were the most important beneficiaries Monday, because the Nasdaq Composite gained about 265 points, or 1.5% as of early afternoon. The S&P 500 rose roughly 55 points, or 1%, while the Dow Jones Industrial Average ticked up about 115 points, or 0.3%. The Russell 2000 moved some 18 points higher, or 0.8%, as of early afternoon.
The nice start for the stock market this week follows the worst week for the markets since April, because the S&P 500 fell 2% last week and the Nasdaq plummeted 3.7%.
Many big tech stocks got hammered, including NVIDIA (NASDAQ:NVDA), which fell 8.5% last week over talk of trade restrictions on semiconductor stocks in China and concern about its already high valuation. But NVIDIA bounced back, rising 4.3% on Monday to $123 per share, riding the tech stock rally.
Tesla and Alphabet report earnings this week
Earnings season is in full swing and the primary of the Magnificent Seven stocks report this week, as Alphabet (NASDAQ:GOOG) releases earnings Tuesday after market close. Analysts anticipated earnings of $1.84 per share, up 28% year-over-year, and revenue of $84.2 billion, up 13% year-over-year.
Particularly, Wall Street analysts will likely be in search of continued momentum related to its AI initiatives in addition to growth in its cloud computing business. Alphabet’s earnings could provide a further lift for tech stocks in the event that they are positive, or potentially drag down the sector in the event that they disappoint.
On Wednesday after the market closes, EV maker Tesla (NASDAQ:TSLA) releases earnings and it is anticipated to see an earnings decline. Analysts estimate a 33% decline in earnings to 61 cents per share with sales increasing barely to $25 billion after the automotive maker reported higher than expected deliveries last month.
Also on Wednesday, the world’s largest payment processor, Visa (NYSE:V), releases its earnings for Q2. Visa typically provides insight into consumer spending and consumer confidence. Its rival American Express already posted strong earnings last week, so investors will likely be hoping for more of the identical.
Other earnings to look at this week are Coca-Cola (NYSE:KO), Moodyʻs (NYSE:MCO) and GE Aerospace (NYSE:GE) on Tuesday; AT&T (NYSE:T), IBM (NYSE:IBM), and Chipotle Mexican Grill (NYSE:CMG) on Wednesday; and Southwest Airlines (NYSE:LUV) and Tradeweb Markets (NASDAQ:TW) on Thursday.
Inflation report looms Friday
There was plenty of positive momentum with inflation rates trending down the past three months. On Friday, the Federal Reserve’s key indicator for the movement of costs, the Personal Consumption Expenditures (PCE) report comes out and it is extremely anticipated.
The PCE index has dropped in each of the past two months, falling to 2.6% in May. The PCE index is anticipated to fall again in June, following the Consumer Price Index (CPI), which plummeted to three% in June, from 3.3% in May.
One other decline within the PCE would show inflation rates are sustainably falling toward the Fed’s goal of two% and will definitely heighten the expectations for a number of rate cuts within the second half of the yr. And that, in turn, could potentially spark a stock market rally.
Finally, the Q2 gross domestic product, or GDP — a barometer for the expansion of the general economy — comes out on Thursday. Economists expect the GDP to have grown 1.9% within the second quarter, up from 1.4% in Q1. Investors will likely be watching closely if economic growth exceeded or fell in need of expectations.