Stocks rebounded after the worst slide this year, with traders gearing up for Nvidia Corp.’s earnings and key inflation data later this week.
A renewed wave of dip buying pushed the S&P 500 higher, following a drop fueled by softer-than-forecast economic data, a jump in consumers’ inflation expectations and a massive expiration of options. The US benchmark has gone 35 sessions without posting consecutive declines of more than 1% — its longest such streak since late December, according to data compiled by Bloomberg.
Just ahead of Nvidia’s results on Wednesday, hedge funds’ net exposure to Magnificent Seven stocks hit the lowest level since April 2023. Meantime, the Federal Reserve’s preferred inflation metric is expected to cool to the slowest pace since June, but glacial progress on taming price pressures overall will keep policymakers cautious about lowering interest rates further.
“Even though stocks posted their worst day of the year on Friday, the stock market has still been off to an impressive start so far in 2025, and if we see blowout earnings from Nvidia and softer-than-expected inflation data, that could add upward momentum to stocks,” said Clark Bellin at Bellwether Wealth.
The S&P 500 rose 0.3%. The Nasdaq 100 added 0.3%. The Dow Jones Industrial Average rose 0.4%.
The yield on 10-year Treasuries was little changed at 4.44%. The Bloomberg Dollar Spot Index was little changed.
US equities won’t remain unpopular for long given the robust outlook for economic growth and corporate earnings, according to some of Wall Street’s top strategists.
Morgan Stanley strategist Michael Wilson — a bearish voice on US stocks until mid-2024 — said he expects capital to return to US stocks, calling the S&P 500 “the highest quality index” with “the best earnings growth prospects.”
“It’s premature to conclude the rotation away from the US is sustainable,” Wilson wrote in a note.
JPMorgan Chase & Co. strategist Mislav Matejka said a more subdued outlook for big tech was indeed a “meaningful impediment” for a renewed US outperformance more broadly. However, US earnings growth would need to undershoot the rest of the world to support an outright bearish view, he added.
Corporate Highlights:
- Apple Inc., as it seeks relief from US President Donald Trump’s tariffs on goods imported from China, said that it will hire 20,000 new workers and produce AI servers in the US.
- Microsoft Corp. has begun canceling leases for a substantial amount of datacenter capacity in the US, a move that may reflect concerns about whether it’s building more AI computing than it will need over the long term, TD Cowen said in a report.
- Starbucks Corp. is eliminating 1,100 corporate jobs in a move aimed at increasing efficiency and quickly enacting changes to revitalize the company.
- Boeing Co. has hired an adviser to market a defense subsidiary that manufactures small, long-range military drones as the planemaker looks to unload businesses that aren’t central to its core commercial and defense operations, according to people familiar with the talks.
- Berkshire Hathaway Inc.’s operating earnings surged 71% in the fourth quarter, as higher interest rates lifted the conglomerate’s investment income and its insurance business improved.
- Apollo Global Management Inc. agreed to buy Bridge Investment Group Holdings Inc. for about $1.5 billion in an all-stock deal, as the asset manager expands in real estate.
- Strategy, the self-styled Bitcoin treasury company that until recently was known as MicroStrategy, said it acquired $1.99 billion more of the cryptocurrency with the proceeds from last week’s convertible bond sale.
Key events this week:
- US consumer confidence, Tuesday
- Fed’s Lorie Logan, Tom Barkin, Michael Barr speak, Tuesday
- Apple shareholder meeting, Tuesday
- US new home sales, Wednesday
- Nvidia earnings, Wednesday
- Amazon holds devices event, Wednesday
- Fed’s Raphael Bostic speaks, Wednesday
- Eurozone consumer confidence, Thursday
- US GDP, durable goods, initial jobless claims, Thursday
- Fed’s Jeff Schmid, Beth Hammack, Patrick Harker, Michael Barr, Michelle Bowman speak, Thursday
- Japan Tokyo CPI, industrial production, retail sales, Friday
- US PCE inflation, income and spending, Friday
- Fed’s Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.3% as of 9:30 a.m. New York time
- The Nasdaq 100 rose 0.3%
- The Dow Jones Industrial Average rose 0.4%
- The Stoxx Europe 600 was little changed
- The MSCI World Index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was unchanged
- The euro was little changed at $1.0466
- The British pound was little changed at $1.2638
- The Japanese yen fell 0.2% to 149.58 per dollar
Cryptocurrencies
- Bitcoin fell 0.3% to $95,435.07
- Ether fell 4.9% to $2,671.22
Bonds
- The yield on 10-year Treasuries was little changed at 4.44%
- Germany’s 10-year yield advanced two basis points to 2.49%
- Britain’s 10-year yield advanced two basis points to 4.59%
Commodities
- West Texas Intermediate crude rose 0.2% to $70.55 a barrel
- Spot gold rose 0.2% to $2,943.06 an ounce
