US stocks make muted start to earnings-packed week
US stocks were little changed on Monday as investors braced for a busy week packed with Big Tech earnings updates, a Federal Reserve rate decision, and the crucial US jobs report.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) drifted just above the flatline, getting off to a muted start after the major stock gauges notched weekly wins. The tech-heavy Nasdaq 100 (^NDX) ticked higher.
With five of the “Magnificent Seven” tech companies set to report earnings, it looks like a crunch week for stocks. Big techs have driven the S&P 500’s recent record-setting gains, and the focus will be on whether their AI efforts and layoffs are paying off.
Microsoft (MSFT) and Alphabet (GOOGL, GOOG) lead out the pack on Tuesday, with Apple (AAPL), Amazon (AMZN), and Meta (META) among the 100-plus flood of corporates on the docket.
At the same time, investors are preparing for the Fed’s policy decision on Wednesday after data last week showed inflation cooling and the economy robust. While policymakers are expected to hold interest rates steady at 5.25%, the market will listen closely to Chair Jerome Powell’s comments for clues as to when cuts could begin amid a scaling-back on March bets.
Also coming is Friday’s US jobs report for December, which will factor into calculations of whether the Fed has managed a “soft landing.”
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Meanwhile, concerns about China’s economic health were stoked by the looming failure of property development giant Evergrande (EGRNQ). A Hong Kong court has ordered the hugely indebted company to liquidate, seen as a milestone in the property crisis upending the world’s second-biggest economy.
Oil prices fell below the flatline as concerns about an impact on Chinese demand vied with supply risks from a tightening in Middle East tensions after a drone attack on US forces. US benchmark WTI futures (CL=F) traded under $78 a barrel, while global benchmark Brent futures (BZ=F) changed hands near $83 a barrel.
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Oil falls as China worries overshadow escalating Middle East tensions
Oil futures fell on Monday, backing off an initial rise after Iran-backed militants killed three US troop members in Jordan over the weekend.
Crude prices fell after a Hong Kong court ordered Chinese property developer Evergrande to liquidate. The ruling deemed the company, once worth about $50 billion, was incapable of delivering on its restructuring plan.
West Texas Intermediate (CL=F) fell more than 1% trading around $77 per barrel. Brent (BZ=F), the international benchmark price, also dropped to trade below $83 per barrel.
Crude rose more than 6% last week as traders assessed what a wider escalation of tensions in the Middle East means for oil prices. Iran backed Houthi rebels have continued to target vessels along the Red Sea area, prompting cargo companies to delay or reroute their shipments.
“While the attacks had traders’ attention, at this point no real oil supplies have been disrupted,” Dennis Kissler, senior vice president at BOK Financial said in a note on Monday.
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Read More: US stocks make muted start to earnings-packed week