Wall Street rose on Monday with key benchmarks set to end July higher on upbeat company earnings and hopes of a soft landing for a resilient US economy, while cooling inflation fuels bets on a rate-hike pause.

Investors await quarterly reports from Apple, Amazon.com and AMD later this week, while July ISM Manufacturing reading and three sets of employment data, including July’s non-farm payrolls, are also in focus.

Second-quarter earnings for S&P 500 companies are now estimated to have fallen 6.4% year-over-year, according to Refinitiv data. While still negative, the forecast is an improvement from the 7.9% drop estimated a week earlier.

“We’ve wrapped up a solid month … and we’re at a point in time where we clearly have seen enough of the earnings reports to know that they’re going to come in better than feared,” said Art Hogan, chief market strategist at B Riley Wealth.

Wall Street rallies on soft landing hopes

The tech-heavy Nasdaq led Wall Street higher last week as megacap growth companies such as Alphabet, Meta Platforms as well as chipmakers Intel and Lam Research posted strong quarterly earnings.

“Towards the end of the week you have economic data and if we were to see a plateau in manufacturing activity but not a collapse of job creation, that would that would clearly keep that soft landing narrative squarely on the table,” Hogan said.

Citigroup raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing.

The benchmark index is 4.9% away from its all-time intraday high hit on January 4, 2022.

Chicago Fed President Austan Goolsbee said the central bank was “walking the line pretty well” on bringing inflation down without causing a recession and will watch the data to judge if more monetary tightening may be appropriate in September.

At 9:48 a.m. ET, the Dow Jones Industrial Average was up 54.51 points, or 0.15%, at 35,513.80, the S&P 500 was up 10.59 points, or 0.23%, at 4,592.82, and the Nasdaq Composite was up 43.63 points, or 0.30%, at 14,360.29.

Nine of the top 11 S&P 500 sectors gained, led by a 1.7% rise in energy stocks.

Financial services provider SoFi Technologies climbed 20.9% on reporting better-than-expected quarterly revenue.

ON Semiconductor added 4.6% after the chipmaker forecast third-quarter revenue above market estimates.

Weighing on the Dow, Johnson & Johnson shed 2.8% after a US judge shot down the drugmaker’s second attempt to resolve tens of thousands of lawsuits over its talc products.

US-listed shares of Xpeng sank 11.6% on report that brokerage UBS downgraded the electric-vehicle maker to “neutral”, while Adobe advanced 3.5%, outperforming its tech peers, after Morgan Stanley raised its rating to “overweight” on the photoshop maker.

Advancing issues outnumbered decliners by a 3.50-to-1 ratio on the NYSE and by a 2.35-to-1 ratio on the Nasdaq.

The S&P index recorded 16 new 52-week highs and no new low, while the Nasdaq recorded 52 new highs and 19 new lows.

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