U.S. stocks rose after temporarily turning negative on Monday to start a big week filled with the Federal Reserve’s interest rate decision, a jobs report and big tech earnings.
The Dow Jones Industrial Average (^IXIC) recovered from earlier losses to hover near the equator, after the blue-chip index surged more than 650 points on Friday. The S&P 500 (^GSPC) rose 0.4% while the tech-heavy Nasdaq Composite (^IXIC) gained 0.6%.
Stocks started the week on a high note after Friday’s rally, as investors cheered a promising inflation reading that bolstered bets on interest rate cuts. But after a series of volatile sessions and a massive selloff in the technology sector, investors are on the lookout for surprises that could put the fragile rally to the test.
The Federal Reserve is not expected to take any action at the end of its meeting on Wednesday, despite signs that the U.S. economy and inflation have reached a sweet spot. Many on Wall Street see other reasons for the central bank to wait until September before taking action.
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Friday’s July nonfarm payrolls report — which is expected to show cracks in the labor market — will play a role in post-facto calculations about the timing and depth of rate cuts in 2024.
Expected earnings this week from Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Meta (META) have also put investors on edge, given the sharp drop in stock prices that followed the first pair of “Magnificent Seven” results.
While investors wait, they will get a deluge of quarterly results from more than 150 S&P 500 companies. McDonald’s (MCD) earnings missed expectations across the board before the bell on Monday, as consumers pulled back on spending.
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