Seven Sectors Rise — But Tech’s Drop Steals the Show
Seven of 11 key sectors are positive. But even a 2.96% gain in Materials and a 1.78% jump in Energy couldn’t offset Technology’s 2.37% drop.
The Material sector is being supported by a strong rebound in gold and silver. A small recovery in crude oil is giving the Energy sector a boost. The Technology sector is being pressured by Nvidia and Microsoft, which are down over 2%, adding to their annual losses. Software shares continue to weaken with companies like ServiceNow and Salesforce down 7% and 5% respectively.
Merck and Pepsi Lift the Dow — Palantir Jumps on Guidance
In other company related news, Merck is up more than 3% after releasing strong earnings. This lifted the Dow by 3.5%. Pepsi also reported strong earnings for a 4% gain. Palantir posted early gains of 6% on upbeat guidance.
Alphabet and Amazon Earnings Loom Large After Microsoft Selloff
Looking ahead, traders are awaiting earnings from Alphabet and Amazon. The anticipation is making investors nervous after last week’s steep Microsoft sell-off.
Although the indexes are hovering near record highs, the rally looks tentative. On one hand, we have the Fed potentially delivering two rate cuts, a strong economy, and solid corporate profits. However, concerns over AI returns are slowing upside momentum. With more earnings reports this week, traders will not only be watching past performance, but their primary concern will be on how AI is performing. Last week, Microsoft dropped after it disappointed investors with its AI guidance.