The Dow Jones and S&P 500 rose slightly Monday morning while the Nasdaq edged higher ahead of a Federal Reserve meeting, as well as a huge earnings wave led by Microsoft (MSFT), Google parent Alphabet (GOOGL) and Meta Platforms (META)
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Electric vehicle titan Tesla (TSLA) got a downgrade Monday as it upped discounts further. Apple (AAPL) and Nvidia stock got price target hikes. Among these megacaps, Apple stock and Google rose slightly, Microsoft and Nvidia (NVDA) edged higher while Meta tilted lower. Tesla stock erased early losses.
On Sunday, Dow giant Chevron (CVX) released some second-quarter figures early, with per-share earnings beating views. CVX stock edged higher. Domino’s (DPZ) reported mixed results Monday. DPZ stock was little changed.
Cadence Design Systems (CDNS) will report Monday night, which also will have implications for rival chip design software firm Synopsys (SNPS). Both Cadence Design and SNPS stock are near buy points.
Trucking firm Yellow (YELL) reached a labor deal Sunday, lifting YELL stock. But XPO Logistics (XPO), along with trucking firms that carry smaller orders such as Old Dominion Freight Line (ODFL) and ArcBest (ARCB), fell modestly as their rival averted a strike and possible bankruptcy.
Tesla, Nvidia and Meta stock are on IBD Leaderboard. Microsoft stock, Cadence Design and SNPS stock are on the IBD Long-Term Leader list. TSLA stock is on the IBD 50. CDNS stock and Tesla are on the IBD Big Cap 20.
Dow Jones Today
The Dow Jones rose 0.45%. S&P 500 advanced 0.3%. The Nasdaq climbed 0.1% after briefly turning lower.
Crude oil futures climbed 1%.
The 10-year Treasury yield fell a few basis points to 3.81%.
Fed Meeting
The Fed starts its two-day meeting Tuesday. After a June pause, the Fed is overwhelmingly expected to raise rates by a quarter point on Wednesday.
But the real question is the rate hike outlook for the rest of the year. Fed policymakers in June forecast two more rate hikes this year, but tame inflation reports have reinforced market expectations of only a modest chance of another move after Wednesday.
The European Central Bank will likely raise rates on Thursday.
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Stock Market Rally
The Dow Jones Industrial Average popped 2.1% in last week’s stock market trading, surging to a 15-month high amid its longest win streak in nearly six years. The S&P 500 index rose 0.8% but closed well off weekly highs. The Nasdaq composite fell 0.6% as it plunged more than 2% Thursday, in no small part due to TSLA stock. The small-cap Russell 2000 gained 1.5%.
The 10-year Treasury yield rose 2 basis points to 3.84%.
U.S. crude oil futures climbed 2.3% to $77.07 a barrel, the fourth-straight weekly gain.
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Chevron Earnings
Chevron (CVX) unexpectedly reported partial second-quarter results on Sunday. Earnings were $3.08 a share, down 47% vs. a year earlier but above views of $2.97. That came amid record production in the Permian Basin.
Meanwhile, Chief Financial Officer Pierre Breber will retire, with Chief Technology Officer Eimear Bonner succeeding him starting in March 2024. The Dow energy giant plans to release full results on July 28.
CVX stock rose 2% Monday.
Tesla Stock
Tesla stock erased early losses to trade flat Monday.
UBS downgraded TSLA to neutral even as it raised its price target to 270 from 220. It says shares reflect improved demand sparked by price cuts, as well as expectations of solid 2024 execution. Meanwhile, Tesla increased Model 3 inventory discounts in the U.S.
Separately, Tesla executives will meet with India’s commerce minister this month to discuss plans for a factory to build a $24,000 car, Reuters reported. That could be the next-generation EV that Tesla plans to also make at a future Mexico plant.
The latest Tesla-India buzz comes after India rejected a proposed joint venture by China EV and battery giant BYD (BYDDF) to make vehicles in the country.
TSLA stock plunged 7.6% last week in an ugly, downside reversal amid above-average volume. Tesla earnings per share and revenue beat, but operating profit unexpectedly fell. Chief Executive Elon Musk dismissed profit margin concerns as “silly” while the company’s Cybertruck seemed to be pushed back toward the end of 2023.
Apple, Other Megacap Stocks
Microsoft and Google will report earnings on Tuesday night, with Meta results due late Wednesday. The results are sure to have huge implications for artificial intelligence, cloud computing and the overall market rally.
MSFT stock edged higher early Monday. Shares hit a record high on Tuesday as Microsoft announced pricing for AI tools for enterprise customers.
GOOGL stock advanced 1%. Shares slumped last week, falling back below the 50-day line within a cup-with-handle base.
META stock lost 1%. Shares fell last week after hitting a 17-month high on Wednesday.
Apple stock rose slightly. The Dow Jones tech behemoth hit a record high on Wednesday before slipping back. Apple has told suppliers that it wants them to make about 85 million units of the next iPhone, in line with iPhone 14 output, Bloomberg reported.
Nvidia stock was about unchanged. Mizuho raised its NVDA price target to 530 from 400. Shares fell modestly last week, just below record highs.
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