NEW YORK: Wall Street rose on Monday ahead of earnings from a host of megacap companies and the final stretch of the Nov. 5 election, while sentiment also improved after developments in the Middle East over the weekend did not disrupt energy supplies.
Israel’s response over the weekend to an Iranian missile attack earlier this month focused, so far, on missile factories and other sites near Tehran, rather than on refineries or nuclear targets, assuaging some worries about the situation in the region.
“(Today’s gains) have more to do with not as bad as feared geopolitical events while Israel’s response was very large, it really didn’t disrupt any of the material commodity flows that would impact markets on a global basis,” said Brian Mulberry, client portfolio manager at Zacks Investment Management.
The focus, however, was on events in the week ahead, most notably corporate results, with around 169 S&P 500 companies scheduled to report through the week.
That includes the bulk of the “Magnificent Seven” group of megacap technology giants that have been Wall Street’s biggest drivers this year, as equities rallied to all-time highs.
Alphabet rose 1%, Meta Platforms was up 0.6% and Apple was 1% higher, ahead of their results later in the week.
Microsoft and Amazon.com also report earnings this week. The five companies jointly make up about 23% of the S&P 500’s weightage, and investor reaction to their results will be a key determining factor in whether indexes continue to climb or retreat.
“The investor community is really starting to want to see results on AI,” Mulberry said.
At 11:51 a.m. the Dow Jones Industrial Average rose 272.42 points, or 0.65%, to 42,386.82, the S&P 500 gained 23.64 points, or 0.41%, to 5,831.76, and the Nasdaq Composite gained 100.38 points, or 0.53%, to 18,618.98.
The small-cap Russell 2000 jumped 1.6%, outperforming major indexes as oil prices eased.
The energy sector dropped 1% as crude prices plunged 5% on easing supply worries, while utilities shares led sectoral gains.
Airline stocks also rallied, with the S&P 500 passenger airlines index up 3.4% to a more than two-year high.
Economic data due this week will be crucial for assessment of Federal Reserve policy, most notably the Personal Consumption Expenditure index and the closely watched nonfarm payrolls report.
Investors all but expect a 25-basis point interest rate reduction at the US central bank’s next meeting, according to CME’s FedWatch.
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