NEW YORK (AP) — U.S. stock indexes were mixed on Monday, kicking off a packed week with earnings reports from Wall Street’s most influential companies and the Federal Reserve’s interest rate meeting.
The S&P 500 recovered from its first weekly loss since April to rise 4.44 points, or 0.1%, to 5,463.54. The Dow Jones Industrial Average fell 49.41 points, or 0.1%, to 40,539.93 and the Nasdaq Composite added 12.32 points, or 0.1%, to 17,370.20.
ON Semiconductor, which supplies chips to the auto and other industries, led the stock gains, rising 11.5 percent after the company reported spring profits that beat analysts’ expectations. McDonald’s rose 3.7 percent even as its latest quarterly profit and sales fell short of expectations. Analysts said the company’s performance at its U.S. restaurants wasn’t as poor as some investors had feared.
Those stocks helped offset losses in the market’s most heavily weighted oil and gas companies after crude prices slumped to two-month lows. ConocoPhillips fell 1.6 percent and Exxon Mobil shed 1 percent on worries about how much crude China’s shaky economy will burn.
Later this week, several of Wall Street’s biggest companies are scheduled to report earnings: Microsoft on Tuesday, Meta Platforms on Wednesday, Apple and Amazon on Thursday. These companies are the largest in the market by market capitalization, so their stock price movements will have a particularly strong impact on Wall Street.
These big tech stocks have driven the S&P 500 to dozens of record highs this year, fueled in part by investor enthusiasm for artificial intelligence technologies, but they have lost steam this month as criticism that they were too expensive and alternatives have started to become more attractive. Investors were shocked by disappointing earnings reports from Tesla and Alphabet last week, raising concerns that other stocks in a group of big tech stocks known as the “Magnificent Seven” could also disappoint.
“The days of AI hype are over,” say Bank of America strategists led by Savita Subramanian. “It’s time to show monetization.”
As Big Tech falters, the U.S. stock market has been buoyed by strength in other sectors that have been hit by high interest rates aimed at taming inflation. Small and mid-cap stocks in particular have soared on hopes that slowing inflation means the Federal Reserve will soon start cutting interest rates.
That trend buckled a bit on Monday, when most of the big tech stocks rose while the smaller caps in the Russell 2000 index fell 1.1%, but the Russell 2000 is still up a market-leading 9.2% so far this month.
The Fed meets this week for its latest interest rate policy meeting, with an announcement due on Wednesday, and while few expect any policy changes at that point, there is widespread expectation that easing will begin at the next meeting in September.
In the Treasury market, bond yields remained relatively stable, with the 10-year Treasury yield falling to 4.17% from Friday’s close of 4.19%. It had risen to a high of 4.70% in April.
Among overseas stock markets, Japan’s Nikkei Stock Average rose 2.1%. Japan’s central bank is also due to announce its interest rate decision this week, with a rate hike expected.
Hong Kong’s index rose 1.3% and Shanghai’s index was little changed after official data on Saturday showed industrial profits rose 3.5% year-on-year in the first half of 2024, a positive sign following recent interest rate cuts and other partial stimulus measures after a top-level Communist Party policy meeting earlier this month.
The FTSE 100 index rose 0.1% in London ahead of this week’s Bank of England meeting, where some investors expect interest rates to be cut.
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AP Business Writer Matt Ott contributed.
