S&P 500 Surpasses 5,000 Amid Strong Big Tech Performance: Weekly Market Overview
As the S&P 500 tops 5,000, led by significant movements in the technology sector, the markets enter a pivotal week. This week is set to be the busiest for first-quarter earnings, with approximately 180 S&P 500 companies—accounting for over 40% of the index’s market cap—scheduled to report their results. High expectations are set for the “Magnificent Seven” megacaps, anticipated to post nearly a 40% profit increase from the previous year, as per Bloomberg Intelligence. This focus on earnings follows a $2 trillion selloff, spurred by geopolitical tensions and indications that the Federal Reserve may delay interest rate cuts.
Key earnings reports this week include tech giants Microsoft Corp., Alphabet Inc., Meta Platforms Inc., and Tesla Inc., collectively known as the Magnificent Seven. With artificial intelligence expected to play a crucial role in future profitability, its impact on earnings is a major focal point for traders, according to a note from a BofA team led by Ohsung Kwon and Savita Subramanian.
Conversely, UBS Group AG’s chief US equity strategist notes a slowdown in the earnings momentum previously enjoyed by big tech, leading UBS to downgrade its sector recommendation for the “Big Six” technology stocks—Alphabet, Apple, Amazon.com Inc., Meta, Microsoft, and Nvidia—to neutral from overweight.
Corporate Highlights:
- Verizon Communications Inc. ( $VS) reports continued customer losses and underperforming revenue.
- Truist Financial Corp. ( $TFC) reveals lower-than-expected first-quarter lending profits and reduces its revenue forecast for the year amid high-interest rates.
- Informatica Inc. ( $INFA) denies engagement in takeover discussions after speculation that talks with Salesforce Inc. had stalled.
- Kroger Co. ( $KR) and Albertsons Cos. ($ACI) agree to sell additional stores to C&S Wholesale Grocers, aiming to secure approval for their proposed $24.6 billion merger from antitrust regulators.
- Viking Holdings Ltd. seeks to raise up to $1.1 billion through an initial public offering in New York, capitalizing on the travel industry’s post-pandemic recovery.
- ASML Holding NV ( $ASML) explores expansion opportunities in the Netherlands, following a €2.5 billion government investment in regional infrastructure and education.
- Tesla Inc. (TSLA) cuts prices in China, potentially igniting a new price war, with Li Auto ( $LI) Inc. immediately responding with discounts and rebates.
- Reliance Industries Ltd., ( $RLI.MU) under billionaire Mukesh Ambani, reports earnings below expectations due to ongoing challenges in its petrochemicals division and higher taxes, despite gains in its consumer sector and a surge in other income.
