The main indexes on Wall Street rose on Monday amid investors betting on industries beyond tech. In general, the week was filled with immense pressure from the Federal Reserve meeting and earnings report. Traders focused on Meta, Google-Owner Alphabet, and Microsoft, whose earnings data showcases whether the stocks can justify the ongoing sky-high valuations. Meanwhile, the tech-heavy NASDAQ index rallied 34% higher this year.
It outperformed its peers after rate-sensitive growth firms increased optimism over AI and the next Federal Reserve monetary tightening policy. Besides, the tech-heavy stocks lagged other indexes as traders hoped for bargains on non-tech stocks. Analysts concluded that investors were broadening the market breadth by reinvesting profits from volatile industries to other markets. Thus, the Dow attained its longest winning streak in over six years.
The oil giant Chevron rose by 2.73% after posting their upbeat preliminary quarterly earnings over the weekend. Yet, stock experts have predicted that its second-quarter revenues will likely decline by 7.9% on Friday. The Federal Reserve increased the borrowing costs by 25 basis points on 26th July after its policy-making meeting. Most economists now believe this would mark the final borrowing costs hike through the ongoing monetary tightening cycle.
In any case, July data indicated that the inflation rate is cooling down. The Nasdaq Composite rose to 14,056.79 by 0.17% or 23.99 points. The S&P 500 rose to 4,557.06 by 0.46% or 20.72 points, while the Dow Jones Industrial Average increased to 35,431.08 by 0.58% or 203.39 points. Overall, 11 S&P 500 industries increased, with the energy stocks leading with a 2.28% gain. As the “Barbie” movie hit the highest domestic debut in 2023, toymaker Mattel rose by 1.99%.
In the meantime, AMC Entertainment increased by 36.05% amid the court blocking their chain’s stock conversion strategy, which would likely risk diluting stakeholders' investments in the company. But AMC entertainment shares dropped by 2.72%. On the other hand, the NASDAQ exchange operator cut weight from several firms that contribute up to half of the Nasdaq 100, seeking to solve the benchmark over-concentration.
Above all, a recent survey concluded that trading activities reduced to a five-month low through July due to the decelerating growth in the service sector. Advancing issues on NASDAQ favored decliners on a 1.05 to 1 ratio, while the problems advancing on NYSE outnumbered decliners by a 1.87 to 1 ratio. Most importantly, the Nasdaq Composite posted 76 new lows & 47 new highs, and the S&P 500 recorded one new low & 19 new 52-week highs.
