Key facts
- US stock indexes traded mixed as oil prices climbed to near two-week highs.
- Salesforce shares rose 3.5% after BofA Global Research upgraded the stock to 'buy'.
- Third-quarter S&P 500 earnings are projected to increase 30.6%.
- Markets are pricing in a 19% chance of a Federal Reserve rate hike this month.
US stock indexes traded mixed on Monday, with technology stocks facing pressure as oil prices climbed to their highest in approximately two weeks. This occurred ahead of significant corporate earnings reports from major banks and key inflation data that could shape the Federal Reserve's future monetary policy decisions.
Brent crude futures were trading above $106 a barrel following weekend strikes on Riyadh's international airport. However, the rise was somewhat contained after President Donald Trump announced an agreement between Ukraine and Russia to cease attacks on each other's energy facilities, following a US diesel-supply deal with Moscow. The specifics of this agreement remain unclear and face opposition in Washington.
The S&P 500's communication services sector saw a 1.1% increase, boosted by Meta's 3.2% gain, while energy stocks added 1.8%. Conversely, heavyweight technology stocks on the benchmark index declined by 0.2%.
Salesforce shares surged 3.5% after BofA Global Research upgraded the stock to 'buy' from 'underperform,' which helped lift the Dow Jones Industrial Average to a nearly three-week high. At 9:40 a.m. ET, the Dow was up 0.21% to 51,761.98, the S&P 500 had gained 0.08% to 7,817.68, and the Nasdaq Composite was down 0.04% to 27,355.94.
Corporate earnings are now a key focus, with third-quarter S&P 500 earnings projected to soar 30.6%, according to LSEG IBES data. Major US banks, including Goldman Sachs, Citigroup, and JPMorgan Chase, are scheduled to release their earnings on Tuesday.
Clark Bellin, president and chief investment officer at Bellwether Wealth, noted that key themes for earnings season include how companies are deploying and profiting from artificial intelligence, their ability to maintain pricing power, and how they are navigating the surge in borrowing costs.