S&P 500 Marks Second Consecutive Monthly Gain Amid Strong Earnings Reports
On Friday, the S&P 500 recorded its second straight monthly gain, thanks to positive reports from Alphabet (NASDAQ: GOOGL) Inc, Microsoft Corp (NASDAQ: MSFT), and Meta Platforms Inc (NASDAQ: META). These reports raised hopes for a robust earnings season despite concerns about a U.S. economic slowdown.
First-Quarter Earnings for S&P 500 Companies Expected to Drop 1.9% Year-Over-Year
According to Refinitiv data, analysts predict a 1.9% decline in first-quarter earnings for S&P 500 companies compared to the previous year, which is an improvement from the 5.1% drop anticipated at the beginning of April.
Debate Emerges Over Valuation of Major Tech and Growth Stocks
With double-digit gains in shares of Apple Inc (NASDAQ: AAPL), Microsoft, and Alphabet this year, there is an ongoing debate about whether the biggest tech and growth names in the U.S. market are becoming overpriced.
Investors Anticipate Another 25-Basis Point Interest Rate Hike After Fed Meeting
Recent economic data has reinforced expectations of a 25-basis point interest rate hike following the U.S. Federal Reserve's two-day policy meeting on Wednesday. Investors are pricing in a 90% likelihood of such a move, as per CME Group's (NASDAQ: CME) FedWatch tool.
Focus on Fed's Statement and Jerome Powell's Press Conference Amid Market Turmoil
Investors will closely watch the Fed's statement and Chair Jerome Powell's press conference for any indication of the central bank pushing back against market pricing of rate cuts before year-end, given the recent banking crisis and looming recession threats.
First Republic Bank Shares Plummet 38.5% in Premarket Trading; JPMorgan Rises
First Republic Bank's shares plunged 38.5% in premarket trading following its seizure by regulators. JPMorgan Chase & Co will purchase most of the bank's assets in a rescue effort led by U.S. regulators, causing JPMorgan's shares to increase by 2.4%.
Banking Indexes Decline Following Silicon Valley Bank and Signature Bank Collapse
The collapse of Silicon Valley Bank and Signature Bank (OTC: SBNY) in March, triggered by a deposit flight, led the U.S. central bank to implement emergency measures to stabilize markets. As a result, the KBW Regional Banking index and the S&P 500 Banks index have lost 22% and 10% this year, respectively.
Upcoming Manufacturing Data and Construction Spending to Offer Clues on Fed's Rate Path
Market participants will analyze manufacturing data from the Institute for Supply Management and S&P Global (NYSE: SPGI) for April, as well as the Commerce Department's construction spending for March, in order to gain insight into the Fed's interest rate trajectory.
Major Companies to Report Quarterly Earnings Before Market Open
Norwegian Cruise Line (NYSE: NCLH) Holdings, ON Semiconductor Corp, MGM Resorts (NYSE: MGM) International, and Franklin Resources Inc (NYSE:BEN) are among the major companies set to announce quarterly results prior to the opening bell.