On Monday, US benchmark equity indexes witnessed notable increases as investors eagerly await a series of significant corporate earnings due for release this week. The Nasdaq Composite climbed by an impressive 1.6%, reaching a level of 18,007.6. Concurrently, the S&P 500 recorded a respectable 1.1% gain, closing at 5,564.4, while the Dow Jones Industrial Average saw a modest advance of 0.3%, closing at 40,415.4.
Technology stocks were the clear front-runners in this upward trend, outpacing other sectors, although energy and consumer staples experienced declines. Major corporations such as Google’s parent company Alphabet, Tesla, Visa, AbbVie, Coca-Cola, IBM, AT&T, 3M, and Charter Communications will be reporting their quarterly financial results imminently, creating a palpable sense of anticipation among market participants. In tandem with these developments, the US 10-year Treasury yield experienced a rise of 1.7 basis points, settling at 4.26%.
Furthermore, the two-year yield increased by 1.4 basis points to 4.52%. These movements in yields reflect changing expectations regarding future interest rates and economic conditions. Focusing on company-specific news, Iqvia’s stock soared by 9.2%, making it the top performer on the S&P 500 index.
This surge follows the firm’s upward revision of its full-year earnings outlook after reporting impressive Q2 results. This dynamic underscores the importance of individual company performance amidst broader market trends. Conversely, Truist Financial's Q2 earnings report fell short of expectations, burdened by a counterbalance of accounting gains from the sale of a unit against securities losses.
However, the company’s shares still managed a gain of 3.2%, reflecting investor confidence despite the challenges. On the telecommunications front, Verizon Communications reported Q2 revenues below consensus estimates, primarily due to a slump in upgrade volumes for wireless equipment. The company’s stock experienced a significant decline of 6.1%, marking the steepest drop on the Dow and the second-largest on the S&P 500, illustrating the volatility faced by industry giants. In the cybersecurity realm, CrowdStrike Holdings faced a notable fall of 13% following an 11% drop on the previous Friday.
Morgan Stanley adjusted its price target downward from $422 to $396, citing uncertainties around the company’s near-term financial outlook due to a recent global technology outage. Nevertheless, analysts believe that CrowdStrike may mitigate potential reputational damage in the long run. In commodity markets, West Texas Intermediate crude oil slipped slightly by 0.2%, settling at $79.95 per barrel.
Precious metals also saw movement, with gold rising by 0.1% to $2,400.50 per troy ounce, and silver adding 0.2% to reach $29.36 per ounce, further reflecting investor sentiment amidst economic fluctuations. Amidst these market dynamics, US President Joe Biden made headlines by dropping out of the presidential race on Sunday, subsequently endorsing Vice President Kamala Harris as the Democratic Party's nominee for president.
This political shift adds another layer of complexity as investors navigate uncertain waters. In a note to clients, D.A. Davidson advised caution against making significant electoral predictions within investment portfolios and noted that elevated volatility should be anticipated due to the prevailing uncertainty in both economic and political arenas..