After three straight negative weeks, the S&P 500 bounced back last week, rising 2.7% to five,100. Meanwhile, the Nasdaq Composite surged 4.3% last week, and the Dow Jones Industrial Average gained just 0.7%. The small-cap Russell 2000 also had a solid week, jumping 2.8%.
The increases were largely because of solid earnings reports from just a few Magnificent Seven stocks, which offset some choppy economic news. Let’s take a take a look at the highlights from last week and see what’s ahead this week.
Excellent news from Tesla outweighs bad
One among the highest gainers last week was Tesla (NASDAQ:TSLA), which gained 14% over the five-day period to shut the week at $168 per share. The rally was long overdue for the EV maker because it has been certainly one of the worst stocks on the S&P 500 this 12 months, plunging 32%.
Tesla didn’t have an excellent first quarter; in actual fact, it posted its biggest year-over-year sales decline in greater than a decade. Nonetheless, that had probably already been baked into its stock when Tesla dropped its earnings results last Tuesday after the market close. Because it typically does each quarter, the automaker had released its delivery and production numbers for the primary quarter in early April.
Nonetheless, what lifted Tesla stock last week was the news that it plans to speed up the timeline for production of its recent line of more cost-effective models to late 2024 or early 2025. It was likely an indication for those investors waiting for excellent news to purchase in, because the stock had turn out to be undervalued.
Big gains for Alphabet and NVIDIA
One other top stock last week was Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), which jumped 11.5%. Google’s parent company posted strong earnings results last Thursday that saw its revenue jump 15% and net income rise 27% 12 months over 12 months — easily topping estimates.
Alphabet reported a 14% rise in Google Search revenue and a 30% surge in its cloud business. For the total 12 months, it expects to expand its operating margin versus its 2023 margins and proceed to speculate in capital expenditures. The cash will probably be spent on upgrading its infrastructure, reflecting the opportunities it sees in artificial intelligence across its business.
The opposite big news for Alphabet was it launched its first-ever dividend, following within the footsteps of Meta Platforms (NASDAQ:META), which introduced its first dividend in Q1. Alphabet will begin with a 20-cent-per-share quarterly dividend payable on June 17. It also announced a $70 billion stock buyback plan.
While NVIDIA (NASDAQ:NVDA) didn’t release earnings results last week, it had the largest gain of all of the Magnificent Seven stocks, climbing 15.1%. It was likely fueled by the solid performances of among the big technology stocks and their plans to proceed to speculate in AI and data centers, which helps NVIDIA.
Microsoft (NASDAQ:MSFT) also posted solid results last week, with revenue up 17% and net income jumping 20% 12 months over 12 months. The stock finished the week with a return of about 2%.
Fed to fulfill this week
The Big-Tech earnings reports offset some uneven economic news last week, because the GDP notched its lowest growth since 2022 in the primary quarter, rising just 1.6%. Meanwhile, the Personal Consumption Expenditures (PCE) index, which the Federal Reserve uses to gauge interest-rate decisions, ticked as much as 2.7% from 2.5% in February.
We’ll see if the PCE has any impact on the Fed’s decision regarding rates of interest because it is because of meet this week. The central bank is about announce its next decision on rates of interest on Wednesday at 2 p.m. Eastern, and most economists expect there to be no movement.
Also this week, more Big-Tech corporations are scheduled to post earnings results, including Amazon (NASDASQ:AMZN) after the market close on Tuesday and Apple (NASDAQ:AAPL) after the closing bell on Thursday. Thus, we expect this to be one other big week for the markets.