S&P 500, Nasdaq extend gains ahead of earnings, Fed decision

NEW YORK: The S&P 500 and Nasdaq climbed to their highest levels in more than a week on Monday, as investors geared up for a slew of mega-cap earnings and a closely watched Federal Reserve decision.

Both indexes extended gains for a fourth consecutive session, putting them on track for their longest winning streak in over a month.

Gains in a handful of mega-cap names did most of the heavy lifting for the S&P 500, with Apple and Meta adding over 2 percent each. Alphabet, Broadcom and Microsoft rose over 1.5 percent each.

Apple and Meta, along with Microsoft and Tesla, are slated to report quarterly results later this week, setting up a key test for a rally powered by a euphoria around AI.

Investors will look for signs of measurable payoffs from AI spending. With concerns over high valuations in the tech space, guidance will be especially important and even a modest stumble could spark a rethink about the AI trade.

“This week’s lineup of megacap earnings should help shape sentiment around the AI trade and the still-struggling tech sector, but Wednesday’s Fed announcement will likely keep politics in the headlines,” said Chris Larkin at E*Trade from Morgan Stanley.

Last week, Trump dialed down tariff threats against the European Union over the Greenland dispute, giving some relief for markets.

Of the 64 companies in the S&P 500 that have reported earnings as of Friday, 79.7 percent beat analyst expectations as per data compiled by LSEG.

At 11:23 a.m. ET, the Dow Jones Industrial Average rose 150.71 points, or 0.31 percent, to 49,249.42, the S&P 500 gained 37.57 points, or 0.54 percent, to 6,953.22 and the Nasdaq Composite gained 142.59 points, or 0.61 percent, to 23,643.83.

Intel shares continued to slide, down 5 percent, following its steepest drop in nearly 18 months on Friday after it forecast quarterly profit and revenue below estimates.

Meanwhile, airlines stocks dropped due to mass disruptions in flight schedules after a massive winter storm hit the eastern United States. United Airlines fell 1.2 percent while JetBlue lost 2.8 percent.

The S&P 500 materials sector were among the best performers, as Gold vaulted to a record high above USD5,000 an ounce, boosting names such as Gold Fields and Harmony Gold.

The Federal Reserve kicks off its two-day meeting on Tuesday, with investors largely expecting officials to keep rates unchanged.