US stocks were little changed on Monday, as investors braced for a busy week filled with Big Tech earnings updates, the Federal Reserve's interest rate decision, and a crucial US jobs report.
The Dow Jones Industrial Average (^DJI) embraced the flat line while the S&P 500 (^GSPC) drifted slightly higher, getting off to a quiet start after major stock gauges posted weekly gains. The tech-heavy Nasdaq 100 (^NDX) rose 0.3%.
With five of the 'magnificent seven' tech companies set to report earnings, it looks to be a rough week for stocks. Big Tech companies have led the S&P 500's recent record gains, and the focus will be on whether AI efforts and layoffs pay off.
Microsoft (MSFT) and Alphabet (GOOGL, GOOG) lead the pack on Tuesday, with Apple (AAPL), Amazon (AMZN) and Meta (META) among the more than 100 companies on the docket.
Meanwhile, investors are bracing for the Federal Reserve's policy decision on Wednesday after data last week showed inflation slowing and the economy strengthening. While policymakers are expected to keep interest rates steady at 5.25%, the market will listen closely to Chairman Jerome Powell's comments for clues on when cuts could begin amid a tapering of March bets.
The US jobs report will also be released on Friday for December, which will factor in calculations of whether the Fed has managed a “soft landing”.
Read more: What a pause on federal interest rate hikes means for bank accounts, CDs, loans and credit cards
Meanwhile, concerns about the health of the Chinese economy have increased due to the impending failure of real estate development giant Evergrande (EGRNQ). A court in Hong Kong ordered the debt-laden company to liquidate the company, which was seen as a milestone in the real estate crisis that has turned the world's second-largest economy upside down.
Oil prices fell as concerns about the impact on Chinese demand competed with supply risks from escalating tensions in the Middle East after a drone attack on US forces. US West Texas Intermediate crude futures (CL=F) were trading below $78 per barrel, while global benchmark Brent crude futures (BZ=F) were trading near $83 per barrel.
Warner Bros. stock has fallen. Discovery due to analyst downgrades
Warner Bros. stock rose. Discovery (WBD) rose as much as 3% on Monday after Wells Fargo downgraded the stock from overweight to equal weight, citing a “risky earnings setup” to start the year.
“We did a thorough examination of WBD's 2024 earnings estimates and came away with more negative,” Wells Fargo analyst Steve Cahall wrote in a note to clients on Monday.
Read more here from Yahoo Finance's Allie Canal.
Trend indicators on Monday
Sophie techniques (SOFI)
SoFi shares rose as much as 22% after the fintech company achieved profitability for the first time since going public under generally accepted accounting principles (GAAP). SoFi's net income for the fourth quarter was $48 million, or $0.02 per share.
Company also It achieved its 11th consecutive quarter of record adjusted net revenue of $594 million.
Short presses
Clear (LCD)
The luxury electric car maker's stock rose as much as 21% on Monday, ranking second on Yahoo Finance's hot stocks list.
The startup is expected to report quarterly results on February 21. Lucid stock has no Buy recommendations from Wall Street analysts, 12 Comments, and 5 Sell.
Short interest in the stock is just over 26% of the float, making it vulnerable to a short squeeze.
Since the beginning of the year, the stock is down about 24%.
iRobot (Erbt)
iRobot shares pared some of their losses after falling as much as 18% following the collapse of the vacuum cleaner maker's sale to Amazon ( AMZN ) amid resistance from EU regulators.
Companies He said There was “no path to regulatory approval for the deal.” iRobot announced Monday that it will cut 31% of its workforce and that CEO Colin Angle will step down immediately.
Why Big Tech Earnings Are Critical to the Health of a Market Rally
The stock market rally is still all about technology.
Strategists have called for a broader market rally, but big technology companies are expected to be the driver of fourth-quarter earnings growth in the S&P 500, according to new data from FactSet.
As Yahoo Finance's Josh Schaeffer explains, five of those companies — Apple, Alphabet, Microsoft, Amazon, and Meta — are scheduled to report their quarterly results this week.
Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Nvidia (NVDA) earnings are expected to grow a combined 53.7% in the fourth quarter. Meanwhile, the other 494 companies in the S&P 500 are expected to see a decline of 10.5%.
Read more here.
Oil falls amid China's concerns that cast a shadow over escalating tensions in the Middle East
Oil futures fell on Monday, pulling back from an initial rise after Iranian-backed militants killed three American soldiers in Jordan over the weekend.
Crude oil prices fell after a Hong Kong court ordered Chinese property developer Evergrande to liquidate. The ruling deemed the company, which was previously worth about $50 billion, unable to implement the restructuring plan.
West Texas Intermediate crude (CL=F) fell more than 1% to trade around $77 per barrel. The price of Brent crude (BZ=F), the international benchmark price, also fell below $83 per barrel.
The price of crude oil rose more than 6% last week, as traders assessed what the broader escalation of tensions in the Middle East means for oil prices. Iran-backed Houthi rebels continued to target ships along the Red Sea region, prompting shipping companies to delay or reroute their shipments.
“Although the attacks have received attention from traders, at this point no real oil supply has been disrupted,” Dennis Kessler, senior vice president of BOK Financial, said in a note on Monday.
Technology stocks rose, and energy prices fell
The major averages were steady Monday morning with technology stocks and consumer discretionary stocks rising, while energy-related stocks lagged.
The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) rose above the flat line. The tech-heavy Nasdaq (^IXIC) was also slightly higher.
Meta (META) hit an intraday high as Microsoft (MSFT) and Amazon (AMZN) rose ahead of their earnings releases this week.
Meanwhile, energy sector ETFs (XLE) fell as shares of Chevron (CVX), Exxon Mobil (XOM) and Occidental Petroleum (OXY) fell slightly.
Oil prices fell on Monday as concerns about the health of China's economy outweighed fears of escalating tensions in the Red Sea region.
West Texas Intermediate crude futures (CL=F) fell more than 1% to trade below $77 a barrel. The price of Brent crude (BZ=F), the international benchmark, also fell more than 1%, hovering above $82 per barrel.
Stocks were little changed to start the big tech earnings week
Stocks opened little changed as investors braced for a busy week with Big Tech earnings results, the Federal Reserve's interest rate decision and the January jobs report.
The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) hover around flat lines after major stock gauges posted weekly gains. The tech-heavy Nasdaq 100 (^NDX) was slightly higher on Monday morning.
Amazon (AMZN) shares rose 0.4% after the e-commerce giant finalized an agreement to acquire Roomba vacuum cleaner maker iRobot (IRBT). Companies He said There was “no path to regulatory approval for the deal.”
iRobot shares sank more than 16%. The company announced that it would cut 31% of its workforce and that CEO Colin Angell would step down effective immediately.
Shares of Tesla ( TSLA ) opened higher on Monday, rebounding from last week's sharp sell-off after the electric car giant offered a gloomy 2024 production outlook.
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