US benchmark equity indexes closed higher Monday as markets awaited key corporate earnings and the Federal Reserve's latest monetary policy decision due later in the week.
The Dow Jones Industrial Average rose 0.4% to 38,386.1, the Nasdaq Composite rose 0.4% each to 15,983.1 and the S&P 500 added 0.3% to 5,116.2. Among sector, consumer discretionary led gainers with communication services and financials as the lone decliners.
Apple (AAPL), Amazon.com (AMZN), Eli Lilly (LLY), Coca-Cola (KO), Advanced Micro Devices (AMD), McDonald's (MCD), Mastercard (MA), and Pfizer (PFE) are among the companies scheduled to post quarterly financial results later this week.
S&P 500 companies' results have been mixed in the current reporting cycle with signs of both "strength and softness," Oppenheimer Asset Management said Monday. Roughly 228 S&P 500 companies have reported results with earnings up 3.4% from a year earlier on the back of a 3.9% increase in revenue, according to the brokerage.
On Monday, Tesla (TSLA) shares jumped 15%, the top gainer on the S&P 500 and the Nasdaq. Chief Executive Officer Elon Musk's visit to China and winning approval for the automated driving system is set to be a "watershed moment" for the company's long-term growth, Wedbush Securities said in a note.
Boeing (BA) is reportedly looking to raise $10 billion in debt to enhance liquidity after burning $3.93 billion in free cash in Q1. The company's debt offering was oversubscribed by almost eight times with about $77 billion in orders, Bloomberg reported. Boeing shares rose 3.8%, the biggest gain on the Dow.
Franklin Resources (BEN) shares dropped 6.4%, the steepest decline on the S&P 500, after the company's fiscal Q2 adjusted earnings fell short of Wall Street's expectations.
The US 10-year yield declined 6.2 basis points to 4.61%, while the two-year rate slid 2.7 basis points to 4.97%.
The central bank's Federal Open Market Committee is expected to announce its next interest-rate decision Wednesday. Markets are widely expecting that policymakers will keep their benchmark lending rate unchanged at 5.25% to 5.5%, according to the CME FedWatch Tool. That would mark the sixth straight pause.
In a bid to tame inflation, the FOMC tightened monetary policy from March 2022 through July 2023.
"Odds are that there will not be anything from the upcoming meeting of the (FOMC) that would alter our baseline forecast for the first rate cut to occur in September, followed by another cut in December," Oxford Economics said in a note. "Given the incoming data on inflation, risks are weighted toward fewer cuts this year."
West Texas Intermediate crude oil dropped 1.4% to $82.72 per barrel Monday.
In economic news, Texas' manufacturing activity unexpectedly slid this month amid soft orders and flat employment, the Dallas Fed said.
Gold fell 0.2% to $2,348.10 an ounce, while silver dropped 0.2% to $27.48 an ounce.