Stock Market Update: S&P 500 Gains Momentum with Tech Sector Surge Ahead of Major Tech Earnings

Tech Stocks Fuel S&P 500 Surge; Key Earnings on the Horizon

Monday witnessed a robust rebound in the S&P 500, driven by a resurgence in technology stocks, following its largest weekly decline since March of the previous year. The uptick comes as the market anticipates earnings reports from major technology firms. At the close of trading, the Dow Jones Industrial Average was up by 253 points (0.7%), the S&P 500 increased by 0.9%, and the NASDAQ Composite saw a rise of 1.1%.

Last week, the S&P 500 experienced its sixth consecutive weekly drop, marking its sharpest decline since March 2023. This week, the focus shifts to the ‘Magnificent 7’ tech giants, with Tesla, Meta Platforms, Microsoft, and Alphabet all scheduled to disclose their quarterly results.

Tesla Adjusts Prices, Tech Giants Set to Report Earnings

Before its earnings report, Tesla’s stock dropped more than 3% following the announcement of significant price reductions across various key markets such as China and Germany—just days after similar price cuts in the U.S., potentially signaling the start of a new price war in the electric vehicle sector.

In other news, Verizon’s shares dipped over 4% despite reporting a smaller-than-anticipated loss in wireless subscribers for the first quarter. The decrease was overshadowed by a weaker-than-expected cash flow of $2.7 billion for the quarter. Conversely, Zions Bancorporation saw a 3.5% rise in its stock after exceeding expectations on both revenue and profits, attributed to reduced credit provisions. Analysts at Morningstar currently view Zions’ stock as undervalued, considering the market’s overly pessimistic view on its net interest income prospects.

Treasury Yields Climb as Economic Data Awaits

The yield on 2-year Treasury notes briefly surpassed 5%, continuing its recent upward trajectory. Investors are keenly awaiting a variety of crucial economic indicators set to be released this week, including manufacturing data, preliminary Q1 economic growth figures, and the Fed’s preferred inflation measure, the PCE price index.

Market expectations have adjusted, with projections now indicating only two rate cuts, fewer than the Fed’s own forecast. The Federal Reserve’s upcoming rate decision on May 1 is highly anticipated, with particular attention on Fed Chairman Jerome Powell’s comments for further insights into future rate adjustments.

Corporate Maneuvers: Salesforce and Matterport Make Moves

Salesforce saw a 1.3% increase in its stock after withdrawing from negotiations to acquire Informatica, which saw its shares decline by 5.5% due to unsuccessful deal discussions. Meanwhile, Matterport’s stock skyrocketed by 175% after CoStar Group confirmed its acquisition of the company for approximately $1.6 billion in enterprise value.

Cryptocurrency Stocks Surge Following Bitcoin Halving

Cryptocurrency-related stocks, including Marathon Digital Holdings, Coinbase Global, Riot Platforms, and MicroStrategy, experienced significant gains as Bitcoin reached $66,402 following its latest halving event. This event, the fourth of its kind, halves the production of Bitcoin by miners, affecting the overall supply on the blockchain network.