Wall Street rises ahead of big week for big tech companies as oil falls nearly 6%

Stan Chow
| Associated Press

New York – US stocks are rising on Monday ahead of a big week of earnings reports from major technology stocks. Meanwhile, oil prices are falling and the US barrel could suffer its worst loss in more than two years.

The S&P 500 rose 0.5% in early trading. The US stock market’s main gauge is coming off its first losing week in seven weeks, but it is still close to its all-time high set earlier this month.

The Dow Jones Industrial Average was up 285 points, or 0.7%, as of 9:35 a.m. ET, and the Nasdaq was nearing its all-time high set in July with a gain of 0.6%.

Big tech stocks have helped lead the way, with five giants known as the “Magnificent Seven” scheduled to report their latest earnings this week. These high-quality stocks have been at the forefront of Wall Street for years and have grown so big that their moves could single-handedly change the S&P 500 Index.

After a summer swoon over concerns that their share prices had risen too quickly relative to their profits, Alphabet, Meta Platforms, Microsoft, Apple and Amazon are under pressure this week to deliver big enough gains to justify reviving many of their their shares. prices.

Another member of the Magnificent Seven, Tesla, had one of its best days in its history last week, reporting more profit than analysts had expected.

Gains in big technology stocks on Monday helped offset losses in oil and gas stocks hit by falling oil prices. Exxon Mobil’s 1.4% decline and ConocoPhillips’ 1.7% decline were the two worst performers in the S&P 500.

A barrel of benchmark U.S. crude fell 5.9%, while a barrel of Brent crude, the international standard, fell 5.9%. It was their first deal since Israel attacked Iranian military targets on Saturday in retaliation for an earlier salvo of ballistic missiles. Israel’s attack was more contained than some investors had feared, raising hopes that the worst-case scenario could be avoided.

In addition to the resulting violence, financial markets are concerned that an escalating war in the Middle East could cut off the flow of oil from Iran, a major oil producer. Such concerns sent Brent crude prices soaring to nearly $81 a barrel in early October, despite signals that there was plenty of oil available to the global economy. It has since fallen back to $71.

Financial markets are also facing the volatility that typically surrounds U.S. presidential elections as Election Day quickly approaches in two Tuesdays. Markets have historically been shaky before elections but calm down afterwards, regardless of which party wins.

The trend affects both the stock and bond markets. In the bond market, Treasury yields remained relatively stable after rising sharply for much of this month.

The 10-year Treasury yield held steady at 4.24%, the same as Friday night. But it’s still well above the roughly 3.60% level it was around early October.

Yields rose as report after report showed the U.S. economy remained stronger than expected. That’s good news for Wall Street because it bolsters hopes that the economy can avoid the worst inflation in generations without the painful recession that many feared was inevitable.

But it is also forcing traders to revise forecasts for how deeply the Federal Reserve will cut interest rates now that it is as focused on keeping the economy running as it is on bringing down inflation. As bets recede on how much the Fed will eventually cut its overnight interest rate, Treasury yields have also returned to some of their previous declines.

In overseas stock markets, Japan’s Nikkei 225 index rose 1.8% after Japanese Prime Minister Shigeru Ishiba’s ruling coalition lost its majority in the 465-seat lower house in key parliamentary elections on Sunday.

Stock indexes elsewhere in Asia and Europe were mixed.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.