US Stocks Update: Dow Narrowly Misses First Close at 35,000 but All 3 Stock Indexes Log Back to Back Record Finishes Ahead of Bank Earnings. On Tuesday, U.S. stock indexes were expected to trade flat to slightly lower as investors anticipated June inflation data and the quarterly results of some of the country’s largest banks, including JPMorgan Chase & Co. (JPM +1.43%)
On Monday, the Dow Jones Industrial Average, S&P 500 index, and Nasdaq Composite climbed to back-to-back record closes, kicking off the week the same way it closed the previous week.
The record finish comes as investors await semiannual testimony from Federal Reserve Chairman Jerome Powell beginning Wednesday, as well as a slew of economic releases throughout the week, signaling the unofficial start of corporate quarterly results.
How did stock benchmarks end?
- The Dow Jones Industrial Average DJIA, +0.36% finished at a record 34,996.18 after rising 126.02 points, or 0.4%.
- The S&P 500 index SPX, +0.35% gained 15.08 points, or 0.4%, to close at a record 4,384.63, after reaching an intraday high of 4,386.68.
- The Nasdaq Composite Index COMP, +0.21% rose 31.32 points, or 0.2%, to a record 14,733.24, after reaching an intraday high of 14,761.08.
The Dow and S&P 500 closed the session at all-time highs on Friday, with weekly advances of roughly 0.2 percent and 0.4 percent, respectively. With a 0.4 percent weekly increase, the Nasdaq Composite closed the week at an all-time high.
What fueled the market?
On Monday, major market indices set back-to-back closing records. The rise came ahead of a number of significant events. The unofficial earnings season will begin later in the week, which JPMorgan Chase & Co. JPM, +1.43% will begin on Tuesday, Powell’s appearance on Capitol Hill, and new inflation data.
“People are expecting excellent results, which may drive the market higher,” said John Carey, director of Equity Income at Amundi U.S., adding that, for the time being, earnings have eclipsed concerns in Washington about planned infrastructure spending and perhaps increased corporate taxes.
“Most people appear to be focused on the health of the economy and the potential of higher earnings to sustain stock values, which are certainly at high levels,” Carey told the press.
Equity markets faced turmoil last week before a thriving, partially driven by a decline in financial returns ended. Lower government debt rates prompted worries about the U.S. economy’s future in the pandemic recovery. Although the spread of the COVID-19 Delta variant is a worry, high estimates for some market sectors have also been allocated.
Some rough trading has also been accused of questions over Fed monetary policy in view of increasing indications of percolating inflation.
The 10-year Treasury yield TMUBMUSD10Y, 1.372% increased by less than a basis point to 1.362% on Monday, while the 30-year Treasury yield TMUBMUSD30Y, 2.001% increased by 1.2 basis points to 1.993%, close to February lows.
President John Williams of the Federal Reserve Bank of New York told reporters on Monday that the prerequisites for reducing the Federal Reserve Bank of New York’s $120 billion monthly bond-buying stimulus program had yet to be fulfilled.
Although fears about inflation and peak growth remain, some analysts believe they are “over-hyped” for markets.
“Both prior inflation fears and current peak growth concerns are likely over-extrapolated reflections of near-term trends that will not persist,” Glenmede’s team, lead by Jason Pride and Michael Reynolds, said in a statement on Monday.
Investors have also been watching for delta-driven COVID infections. With a total of 33.85 million COVID cases and 607,156 fatalities, the United States tops the globe. Dr. Anthony Fauci stated on Monday that boosters were unnecessary for the time being, but during a CNN interview on Sunday, he claimed it was “horrifying” to witness conservatives applaud for low vaccination rates, blaming “ideological rigidity” for impeding the battle against the pandemic.
US Stocks Update:
“We have long cautioned that vaccines are unlikely to result in a seamless transition to normalcy,” Ben May, head of global macro research at Oxford Economics, wrote on Monday.
There were no major data releases on Monday ahead of a busy week of economic statistics, which began with a reading of consumer prices on Tuesday.
Separately, investors were paying attention to negotiations with G-20 finance ministers, who are attempting to examine the possible consequences of a proposal for a global minimum tax.
“We need sustainable streams of income that do not rely on further taxing employees’ salaries and worsening the economic inequities that we are all committed to reducing,” U.S. Treasury Secretary Janet Yellen said in a speech to European Union countries regarding international corporate tax reform.
Companies in Focus:
- Broadcom Inc. AVGO, +1.16 percent shares climbed 1.2 percent Monday after The Wall Street Journal reported that the semiconductor and software firm was in discussions to acquire SAS Institute Inc. in a transaction for $15 billion to $20 billion.
- Apple Inc. AAPL, -0.42 percent shares dipped 0.4 percent on the same day that a Delaware federal court dismissed a Blix Inc. lawsuit, saying it failed to establish how Apple hindered competition in the mobile operating system market.
- L Brands Inc. LB, +4.16 percent said that it will split into two publicly listed companies next month, with the Victoria’s Secret & Co. underwear section trading as “VSCO” and the Bath & BodyWorks Inc. arm trading as “BBWI” beginning Aug. 3
- Shares of GameStop Inc. GME, -1.04 percent fell 1% on Monday after Ascendiant Capital Markets raised its 12-month price objective to $25 from $10, although the company’s closing price of $189.25 remained unchanged.
- Weber, the producer of outdoor barbecues, has filed for IPO, nearly 50 years after its distinctive dome-shaped grill was created. The stock will be listed on the New York Stock Exchange under the symbol WEBR.
- Virgin Galactic Holdings Inc. SPCE shares fell 17.3 percent Monday, the most since March 16, 2020, a day after founder Richard Branson and five crewmates successfully went into suborbital space on the company’s VSS Unity rocket-powered spaceplane.
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