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On Monday, the Nasdaq Composite dropped as investors awaited corporate earnings reports from major tech companies and new economic data. The tech-heavy index closed at 12,037.20, down 0.29%, while the Dow Jones Industrial Average ended up 0.2% and the S&P 500 closed 0.09% higher. The market is eagerly anticipating earnings reports from high-interest companies like Alphabet, Microsoft, Amazon, and Meta this week, which marks the halfway point of earnings season. However, experts believe it may be difficult for tech stocks to rally on the back of financial reports as they have already significantly advanced this year.
In addition to earnings reports, investors closely monitor new economic data for insights into inflation and whether the Federal Reserve will announce another rate hike at its next meeting in May. GDP numbers for the first quarter and April’s consumer sentiment data are among the data points scheduled for release later in the week. While 76% of S&P 500 companies that have reported quarterly results so far have beaten analysts’ earnings estimates, first-quarter earnings for S&P 500 companies are expected to decline overall by 5.2%.
On Monday, energy saw the largest increase of 1.54%, followed by materials at 0.69% and health care at 0.56%. The overall change in all sectors was an increase of 0.09%. Information technology had the largest decrease at 0.42%, followed by real estate at 0.31% and financials at 0.20%. The communication services and consumer discretionary sectors also saw a slight decrease in stock prices.
Major Pair Movement
On Monday, the dollar index fell by 0.37% due to the euro’s strong gains, despite weakness in the yen. This is ahead of major central bank meetings this week and next, which are expected to confirm market beliefs that the ECB will take over the rate-hiking baton from the Fed this year, while the BoJ will not participate.
The euro was lifted by expectations of further ECB rate hikes of almost a full percentage point before year-end, as well as improving German business sentiment, the Bundesbank’s upwardly revised Q1 GDP expectations and strong euro zone PMI readings. ECB comments largely supported the rate-hike expectations. Meanwhile, the yen weakened due to BoJ Governor Kazuo Ueda’s statement that the policy would not be tightened at Friday’s meeting.
The sterling also rose, trading at its highest since April 14’s 10-month high at 1.2545, with the BoE further behind the inflation curve than the Fed. Investors are waiting for robust US data to further retrace March’s dive, and to see if the Fed will raise rates for the last time next week.
Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.
Economic Data
| Currency | Data | Time (GMT + 8) | Forecast |
| USD | CB Consumer Confidence | 22:00 | 104.1 |
