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U.S. stocks were little changed on Monday as investors braced for a busy week packed with Big Tech earnings updates, Federal Reserve interest rate decisions and important U.S. jobs data.
The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) were trading just above flatline, off to a quiet start after the major stock indexes posted weekly wins. The tech-heavy Nasdaq 100 (^NDX) rose 0.2%.
It’s shaping up to be a tough week for stocks, with five of the Magnificent Seven tech companies set to report earnings. Big tech companies have driven the S&P 500’s recent record rally, and the focus will be on whether their AI efforts and job cuts are paying off.
Microsoft (MSFT) and Alphabet (GOOGL, GOOG) lead the way on Tuesday, with Apple (AAPL), Amazon (AMZN) and Meta (META) among more than 100 companies named to vote.
At the same time, investors are bracing for the Fed’s policy decision on Wednesday after last week’s data showed slower inflation and a stronger economy. Policymakers are expected to keep interest rates on hold at 5.25%, but markets will listen closely to Powell’s comments for clues as to when rate cuts will begin in the tapering of the March rate cut. It will tilt.
December U.S. jobs data will also be released on Friday and will be factored into the Fed’s calculations of whether it has achieved a “soft landing.”
read more: Impact of the Fed’s interest rate hike suspension on bank accounts, CDs, loans, and credit cards
Meanwhile, the impending bankruptcy of real estate developer Evergrande (EGRNQ) has heightened concerns about the health of China’s economy. A Hong Kong court ordered the heavily indebted company into liquidation, in what was seen as a milestone in the real estate crisis rocking the world’s second-largest economy.
Oil prices have fallen due to a combination of concerns about the impact on Chinese demand and supply risks from escalating tensions in the Middle East after drone attacks on U.S. troops. US benchmark WTI futures (CL=F) traded below $78 per barrel, while global benchmark Brent futures (BZ=F) traded around $83 per barrel.
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Oil falls as China worries about escalating tensions in the Middle East
Oil futures fell on Monday, reversing earlier gains after Iranian-backed militants killed three US soldiers in Jordan over the weekend.
Oil prices fell after a Hong Kong court ordered Chinese real estate developer Evergrande to go into liquidation. The ruling determined that the company, once worth about $50 billion, was incapable of carrying out its restructuring plan.
West Texas Intermediate (CL=F) fell more than 1%, trading around $77 a barrel. Brent (BZ=F), the international standard price, also fell and was trading below $83 per barrel.
Oil prices rose more than 6% last week as traders assessed what broader escalating tensions in the Middle East meant for oil prices. Iranian-backed Houthi rebels continue to target ships along the Red Sea coast, forcing cargo companies to delay or reroute shipments.
“While this attack has attracted the attention of traders, there has been no substantial disruption to oil supply at this time,” Dennis Kistler, senior vice president at BOK Financial, said in a note Monday.
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