The S&P 500 and Nasdaq posted modest gains on Monday in subdued trading, as investors remained cautious ahead of a packed week featuring key earnings reports, economic data, the Federal Reserve’s rate decision, and ongoing Middle East tensions.
All three major U.S. indexes fluctuated throughout the session, showing limited direction following last week’s rally. Both the S&P 500 and Nasdaq continued their streak of record closing highs, while the S&P 500 has now surged more than 100% since the bull market began in October 2022.
Earnings season is in full swing, with several major companies set to report this week, including five of the “Magnificent Seven” tech giants—Amazon, Alphabet, Meta Platforms, Apple, and Microsoft. Investors are closely watching to see whether these firms are beginning to see returns on their significant investments in artificial intelligence.
So far, 139 S&P 500 companies have reported first-quarter results, with 81% surpassing expectations. Analysts now project overall earnings growth of 16.1% year-over-year, up from 14.4% earlier this month. Companies reporting this week represent roughly 44% of the index’s total market value.
Geopolitical developments also remain in focus. Efforts to restart U.S.-Iran negotiations continue after President Donald Trump canceled a planned diplomatic trip. Meanwhile, Iran’s ongoing restrictions in the Strait of Hormuz are adding pressure, as it demands the lifting of U.S. sanctions before further talks.
Attention is also on the Federal Reserve, which begins its two-day policy meeting on Tuesday. The central bank is widely expected to keep interest rates unchanged, but investors will closely analyze Fed Chair Jerome Powell’s comments for insights into the economic outlook and inflation risks driven by rising energy prices.
By the close, the Dow Jones Industrial Average slipped 0.13%, while the S&P 500 gained 0.12% and the Nasdaq rose 0.20%. Communication services led sector gains, while consumer staples lagged.
Among individual stocks, Verizon rose 1.5% after raising its annual forecast, while Domino’s Pizza dropped 8.8% following weaker-than-expected sales. Nvidia climbed 4%, extending its recent rally and pushing its valuation back above $5 trillion.
Market breadth was mixed, with advancing stocks slightly outpacing decliners on the NYSE, while declines led on the Nasdaq. Trading volume came in at 15.59 billion shares, below the recent 20-day average.
