US benchmark equity indexes experienced a notable ascent on Monday, driven by investor anticipation of significant corporate earnings due to be unveiled later in the week. The Nasdaq Composite surged by 1.6%, closing at 18,007.6, while the S&P 500 followed suit with a 1.1% increase, reaching 5,564.4.
The Dow Jones Industrial Average registered a more modest gain of 0.3%, finishing at 40,415.4. Technology emerged as the front-runner among sectors, contributing to this upward trend, whereas energy and consumer staples faced downward pressure. Among the prominent companies scheduled to disclose their quarterly financial figures are Google parent Alphabet ($GOOGL), Tesla ($TSLA), Visa ($V), AbbVie ($ABBV), Coca-Cola ($KO), International Business Machines ($IBM), AT&T ($T), 3M ($MMM), and Charter Communications ($CHTR).
Investors closely watch these reports, which could significantly impact market sentiment. In fixed-income news, the US 10-year yield lifted by 1.6 basis points to 4.25% while the two-year rate saw an incremental increase of 1.4 basis points, settling at 4.52%. This movement in yields highlights ongoing concerns surrounding inflation and interest rates, adding another layer of complexity for investors. In individual stock news, Iqvia ($IQV) saw its shares leap 9.2%, marking it as the top performer on the S&P 500.
The surge followed the company's raised full-year earnings forecast after a strong showing in the second quarter. Conversely, Truist Financial ($TFC)'s second-quarter results displayed a year-over-year decline, attributed to an accounting gain from a unit sale being offset by losses in securities. Despite these challenges, the company's stock showed resilience, closing 3.2% higher. On the telecommunications front, Verizon Communications ($VZ) reported second-quarter revenue that fell short of estimates, primarily due to decreased volumes in wireless equipment upgrades.
This prompted a 6.1% decline in the telecommunications giant's share price, positioning it as the worst performer on the Dow and the second-worst on the S&P 500. CrowdStrike Holdings ($CRWD) faced a notable downturn, suffering the largest drop on both the S&P 500 and Nasdaq on this day, with a decrease of nearly 14%.
The decline followed an 11% drop on Friday, leading Morgan Stanley to adjust its price target for the stock, reducing it to $396 from $422. The investment firm cited that the cybersecurity company may face short-term financial uncertainty after a recent global technology outage, although it could mitigate potential 'reputational damage' over time. In commodity markets, West Texas Intermediate crude oil prices slipped 0.2%, settling at $79.95 per barrel, amid fluctuating global demand and supply dynamics. Political news also made headlines, as President Joe Biden announced his withdrawal from the presidential race, endorsing Vice President Kamala Harris as the Democratic nominee.
This unexpected development may introduce further variety in investment strategies. Analysts remain cautious, advising against making definitive election predictions in investment portfolios but highlighting anticipated elevated volatility due to current uncertainties, a sentiment echoed by D.A. Davidson in a Monday client note. Meanwhile, gold prices remained relatively stable at $2,399.90 per troy ounce, with silver witnessing a slight increase of 0.1%, trading at $29.33 per ounce.
These precious metals often serve as safe-haven assets during tumultuous times, reflecting the ongoing geopolitical and economic complexities..