Stock market today: U.S. stocks end higher ahead of Fed, megacap tech earnings
Investing.com -- U.S. stocks closed higher on Monday, as investors braced for a key week featuring a Federal Reserve policy meeting and a wave of corporate earnings amid elevated geopolitical tensions.
The Dow Jones Industrial Average traded 314 points, or 0.6%, higher, the S&P 500 index gained 35 points, or 0.5%, and the NASDAQ Composite rose 100 points, or also 0.4%.
"The landscape is much the same as it was on Friday, but while bulls are still in control of the narrative, the busy upcoming week of earnings represents a major test," Vital Knowledge’s Adam Crisafulli wrote in a note.
Fed meeting in spotlight
The main event of the week is the Federal Reserve’s two-day policy meeting, which is set to conclude on Wednesday, with markets broadly expecting the central bank to hold interest rates steady after three consecutive cuts in previous meetings.
"Similar to last year, it seems that the Fed will start an extended pause after a series of cuts at the end of last year," said analysts at ABN Amro, in a note. "We’ve recently updated our Fed forecast and now expect the policy rate to stay on hold until June. ’Fedspeak’ has turned relatively hawkish since the December meeting, growth is looking strong, and the unemployment rate has somewhat stabilized."
U.S. President Donald Trump’s spat with Fed Chair Jerome Powell, which has raised concerns over the independence of the Fed from political interference, will also be in the spotlight. Earlier this month, Powell said the Justice Department had opened a criminal investigation into him -- a move the long-time Fed leader described as politically motivated.
Powell is due to step down from the helm of the Fed in May, and Trump is expected to announce his replacement shortly.
Big tech earnings due
The calendar this week is also packed with corporate earnings that could influence market direction. About one-fifth of the S&P 500 is due to report quarterly results, including four of the so-called “Magnificent 7” megacap companies:
Tesla (NASDAQ:TSLA) is due to report on Wednesday, alongside Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META), while Apple (NASDAQ:AAPL) is scheduled for Thursday.
Investors will scrutinize these reports for signs of resilience in consumer demand, progress on artificial intelligence initiatives, and the outlook for margins amid rising costs and geopolitical uncertainty.
Elsewhere, shares of American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL) and United Airlines (NASDAQ:UAL) all fell on worries over possible flight delays and cancellations due to a heavy winter storm blanketing many American states.
Baker Hughes (NASDAQ:BKR) stock rose after the energy services company reported an 11% rise in fourth quarter adjusted profit as demand for its gas technology equipment and services more than offset weakness in its oilfield services and equipment business.
Gold surges above $5,100/oz
Global worries remained elevated as Trump warned on Saturday he would impose a 100% tariff on Canada if Ottawa follows through on a trade deal with China.
Prime Minister Mark Carney, for his part, said Canada has "no intention" of going after a free trade deal with China. He added that Ottawa respects its commitments made under a separate pact with the U.S. and Mexico, and would inform both of such an agreement before pursuing it.
This follows the U.S. president rowing back last week on his threat of trade tariffs on many countries in Europe as the U.S. received control of Greenland, and thus gaining strategic influence in the Arctic.
Gold prices surged to record highs above $5,100 an ounce for the first time, extending a blistering rally from last week as investors rushed into the safe-haven asset amid an uncertain geopolitical landscape.
Additionally, oil prices edged slightly lower, consolidating after recent gains on renewed tensions between the U.S. and Iran as well as wintery conditions in large parts of the U.S.
Brent futures lost 0.3% to $64.90 a barrel and U.S. West Texas Intermediate crude futures fell 0.4% to $60.80 a barrel.
Both benchmarks notched weekly gains of 2.7% last week, closing on Friday at their highest points since January 14.
On Thursday, U.S. President Donald Trump said the U.S. had an "armada" heading toward Iran, one of the largest crude producers in the Middle East, and a U.S. military aircraft carrier strike group and other assets are expected to arrive in the region in the coming days.
Also, in the U.S., crude and natural gas production fell and spot power prices spiked as a winter storm swept across the country.
Ayushman Ojha and Peter Nurse contributed to this article - www.investing.com
