Nasdaq, S&P hit record levels as megacaps rise ahead of tech earnings
The S&P 500 and the Nasdaq reached new record highs on Monday, bolstered by gains in megacaps as investors geared up for the week's major tech earnings, while the prospects of fresh trade deals also boosted sentiment.
By late Monday morning (US time), the S&P 500 gained 34.97 points, or 0.56%, to 6,331.90 and the Nasdaq Composite gained 147.24 points, or 0.71%, to 21,042.87.
The Dow Jones Industrial Average rose 201.87 points, or 0.46%, to 44,544.76, just 1.28% shy of its all-time high.
Verizon gained 4.1% after boosting its annual profit forecast. The stock also drove up the communications sector , which emerged as the top gainer among other sectors.
Most big-tech names moved higher, pushing the S&P's information technology sector up 0.6% to hit an all-time high.
The spotlight was on Google-parent Alphabet and electric-vehicle maker Tesla, whose results this week will kick off the "Magnificent Seven" earnings parade, and could set the tone for Wall Street.
Shares of Alphabet rose 2.1%, while Tesla dipped 0.2%. Both stocks have lagged their peers so far this year, with Tesla down 18.5% year to date and Alphabet slipping 0.2%.
"It is going to be interesting to see the Tesla and Google reports," because those two are kind of "underachievers in the Mag 7 this year," said Mike Dickson, head of research at Horizon Investments.
"We're going to need these earnings reports to just really knock it out of the park if we want to see this little leg of the rally continue."
Despite US President Donald Trump's August 1 tariff deadline, the S&P 500 and the Nasdaq reached new heights recently as investors believed that the economic fallout from tariffs might not be as dire as once feared.
Trump has threatened to slap 30% tariffs on imports from Mexico and the EU, and sent letters to other trading partners, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20% to 50%.
Investors were expecting some progress in trade talks after US Commerce Secretary Howard Lutnick on Sunday expressed confidence over striking a trade deal with the European Union.
However, EU diplomats said the 27-member bloc is exploring a broader set of possible counter-measures against the United States, as hopes for a breakthrough deal with Washington dwindled.
On the economic data front, investors will keep a close eye on jobless claims figures and the July business activity report, expected on Thursday.
They will also closely analyze Federal Reserve Chair Jerome Powell's remarks on Tuesday for any clues on the central bank's next move, especially after last week's mixed inflation signals.
Traders have largely ruled out a July rate cut, and are now pegging the odds at about 56% for a September reduction, according to CME Group's FedWatch tool.
Advancing issues outnumbered decliners by a 3.02-to-1 ratio on the NYSE, and by a 2.58-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and 5 new lows, while the Nasdaq Composite recorded 73 new highs and 34 new lows.
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