US stocks muted as tech weakness offsets energy gains; earnings in focus

The S&P 500 and Nasdaq hovered near the flatline on Monday as weakness in technology stocks offset gains in energy and communication services. Investors remained cautious as oil prices reached two-week highs ahead of major bank earnings and inflation data that could influence the Federal Reserve’s interest-rate outlook, Reuters reported.

The Dow Jones Industrial Average rose 107.03 points, or 0.21%, to 51,761.98. The S&P 500 gained 6.14 points, or 0.08%, to 7,817.68, while the Nasdaq Composite slipped 10.23 points, or 0.04%, to 27,355.94.

Brent crude traded above $106 a barrel following deadly strikes on Riyadh’s international airport over the weekend.

The rise in oil prices was partly contained after US President Donald Trump said Ukraine and Russia had agreed to halt attacks on each other’s energy infrastructure following a US diesel-supply deal with Moscow. Details of the agreement remained unclear, while the proposal faced opposition in Washington.

The S&P 500 communication-services sector gained 1.1%, supported by a 3.2% rise in Meta Platforms. Energy stocks advanced 1.8%, while heavyweight technology shares fell 0.2%.

Salesforce jumped 3.5% after BofA Global Research double-upgraded the stock to “buy” from “underperform,” helping the Dow reach a near three-week high, Reuters reported.

Corporate earnings are moving to the centre of investors’ attention. Aggregate S&P 500 profits are expected to surge 30.6% in the third quarter, according to LSEG IBES data.

Major banks, including Goldman Sachs, Citigroup and JPMorgan Chase, are scheduled to begin reporting results on Tuesday.

“The big themes to watch in earnings season include how companies are deploying and profiting from AI,” Clark Bellin, president and chief investment officer at Bellwether Wealth, told Reuters.

Bellin said investors would also focus on whether companies can preserve or increase their pricing power and how they are managing a surge in borrowing costs that was not a significant concern a year ago.

Treasury yields reached 24-year highs earlier this month as elevated energy costs fuelled concerns that inflation could remain persistent and keep Fed policymakers hawkish. The US Treasury market was closed on Monday for Columbus Day.

Recent reports showing softer-than-expected inflation and weaker employment growth have reduced expectations of an imminent rate increase. That has increased the importance of consumer and producer inflation readings and retail sales data due later this week.

Traders see a 19% chance that the Fed will raise rates this month, according to the CME FedWatch Tool. Remarks from Cleveland Fed President Beth Hammack were also due later in the day.

Among individual stocks, Chipotle Mexican Grill fell 3% after Starbucks said it was not seeking to acquire the restaurant chain.

Quantum-computing company IonQ declined 4.7% after agreeing to buy privately held cybersecurity firm Elisity in an all-stock transaction valued at up to $1.3 billion.

IREN rose 2% after The Information reported that Anthropic had entered into a multiyear cloud agreement with the data-centre operator.

Declining stocks outnumbered advancers by 1.25 to 1 on the NYSE and 1.44 to 1 on the Nasdaq.

The S&P 500 registered nine new 52-week highs and four new lows, while the Nasdaq Composite recorded 23 new highs and 123 new lows.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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