Yahoo Finance 
Ines Ferré
Stock market today: S&P 500 snaps 6-day losing streak ahead of Big Tech earnings rush
US stocks rebounded on Monday, with the S&P 500 snapping a six-day losing streak as investors braced for a rush of Big Tech earnings.
The S&P 500 (^GSPC) rose 0.9% to climb back above 5,000 after closing below the key level on Friday for the first time since February. The Dow Jones Industrial Average (^DJI) added 0.7%, or more than 200 points. The tech-heavy Nasdaq Composite (^IXIC) also gained 1.1% as AI darling Nvidia (NVDA) rebounded by adding than 4%.
Hopes are now resting on Big Tech earnings this week to reassure and reignite the market. On deck are quarterly reports from Meta (META), Microsoft (MSFT), and Alphabet (GOOG).
The focus Monday was on Tesla (TSLA) as the EV maker cut prices in the US, China, and several other countries. Tesla will report quarterly results on Tuesday after the market close. The Elon Musk-led company has already unsettled some investors with its robotaxi push and decision to have shareholders vote again on Musk's rejected pay package. Tesla shares lost 3.4%.
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Meanwhile, the debate over the Federal Reserve's stance on rate cuts continued to rumble after Chair Jerome Powell and fellow policymakers turned more hawkish last week in the face of persistent inflation. Given that, minds are already turning toward Friday's release of the PCE index — the Fed's preferred inflation gauge — as critical to assessing whether rates will stay higher for longer.
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S&P 500 breaks six-day losing streak, Nasdaq rebounds ahead of Big Tech earnings
The S&P 500 (^GSPC) rose 0.9% to break a six-day losing streak and climb back up above the 5,000 level. The Dow Jones Industrial Average (^DJI) also gained 0.7%.
The Nasdaq Composite (^IXIC) rebounded 1.1%, led by shares of Nvidia (NVDA), which rebounded more than 4% after sinking 10% on Friday.
Tesla (TSLA) shares fell more than 3% as investors reacted to the EV maker's price cuts on vehicles in China. Monday marked the seventh consecutive session of declines for Tesla. The electric vehicle company will report earnings on Tuesday after the close.
Meanwhile, automaker GM (GM) is scheduled to post quarterly results prior to the market open.
Spotify (SPOT) will also report results before the opening bell on Tuesday. Wall Street expects the music streamer to swing to a profit on an adjusted basis as the company continues to implement its recent "efficiency" strategy.
- Ines Ferré
Bitcoin climbs 2%, hovers above $66,000
Bitcoin (BTC-USD) climbed more than 2% over the past 24 hours following the cryptocurrency's recent halving, a once-every-four-year event that divides the rewards for mining and limits the number of tokens in circulation.
"Classically, wherever you have new supply constrained ... and demand stays constant, you get higher prices. Bitcoin is an incredibly cyclical asset. We'd expect more upside," FS Investments chief market strategist Troy Gayeski, told Yahoo Finance's Morning Brief.
"The cautionary note, though: It's unclear to everyone how much of that upside is priced in because you had the ETF flows, the approval, the surge, and you already made new highs prior to the halving, which had never been done before," he added.
Bitcoin reached an all-time high last month when it exceeded $73,000 per token. Year to date, the digital asset is up roughly 50% following the approved listings of spot bitcoin exchange-traded funds (ETFs) in January.
- Josh Schafer
The stock market backdrop looks similar to the 2023 drawdown to these Wall Street strategists
Stocks have recovered from their recent slump on Monday.
But bearish strategists on Wall Street still see key concerns that aren't going away anytime soon for stock investors.
With Federal Reserve interest rate cut expectations fading, signs of inflation remaining sticky, and stocks still trading at higher-than-average valuations, many believe the market is in a similar position to where it stood entering its three-month downturn in the late summer and fall of 2023.
"Price action may depend on earnings and could stabilize near-term," JPMorgan's chief market strategist Marko Kolanovic wrote in a note on Monday. "Beyond this, however, we think the sell-off has further to go. We remain concerned about continued complacency in equity valuations, inflation staying too hot, further Fed repricing, and a profit outlook where the implied acceleration this year might end up too optimistic."
"The current market narrative and patterns are increasingly resembling those of last summer, when upside inflation surprises and hawkish Fed revisions drove a correction in risk assets, but investor positioning now appears more elevated."
Last summer, markets became increasingly pessimistic about the likelihood of Federal Reserve interest rate cuts coming soon. This contributed to a rapid rise in bond yields that ultimately weighed on equities.
Julian Emanuel, who leads Evercore ISI's equity, derivatives, and quantitative strategy, recently told Yahoo Finance things are setting up like last summer too.
Emanuel has been closely watching the 2-year Treasury yield, which recently hit 5% for the first time since November 2023. Stocks subsequently sold off in tandem with the move.
"The reason it might be more of the concern at this point is because of that implicit promise that markets have traded on of three [Fed rate] cuts dialed back," Emanuel said. "And if you look at it going back to March, I think it's a lot more than a coincidence the market rolled over from the highs literally precisely the moment the market started pricing in fewer than those three promised cuts."
Morgan Stanley chief investment officer Mike Wilson wrote in a research note on Sunday that with the 10-year Treasury yield (^TNX) now handily above the critical level of 4.35% to 4.40% he'd been watching, higher yields could weigh on stock valuations moving forward.
"If yields stay at current levels over the next 3 months, multiples could face ~5% downside within that period all else equal (which would equate to 4700-4800 on the S&P 500)," Wilson wrote.
Wilson notes that with elevated yields, any move higher from here will "largely have to be earned through earnings upside rather than multiple expansion."
- Ines Ferré
Tesla earnings preview: Investors eye EV demand, guidance, and product roadmap following stock wipeout
Yahoo Finance's Pras Subramanian reports.
Tesla (TSLA) will report Q1 earnings after the bell on Tuesday, giving a much-needed update on the EV maker’s current and future prospects as investor sentiment slides.
Tesla’s Q1 has been nothing short of a rollercoaster ride. Shares were hit hard after the company reported Q4 results that disappointed, issued weak and non-specific 2024 delivery guidance, missed on Q1 deliveries, and did not refute reports of the demise of a sub-$30K volume EV. Tesla stock is down a whopping 43% year to date and 19% during its current seven-day losing skid.
Read more here.
- Josh Schafer
UBS downgrades 6 of the 'Magnificent 7' stocks
UBS Investment Bank Chief US equity strategist Jonathan Golub downgraded six of the "Magnificent 7" stocks — Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Nvidia (NVDA) — from Overweight to Neutral in a new research note on Monday.
His call comes as the Magnificent 7, which also includes Tesla (TSLA), just had its largest weekly market cap loss in history. All seven of the Big Tech leaders are off their recent highs, as highlighted by a 10% single-day drawdown for Nvidia, its worst one-day price performance since March 2020.
Golub, who rates sectors within the S&P 500 (^GSPC), not individual stocks, remains Overweight on technology outside of the six stocks he names in his note. But for the large companies who have grown earnings significantly over the past year, Golub believes the tide may be shifting, and other areas are set to outperform the largest stocks in the S&P 500.
"Investors attribute the run in mega cap stocks to animal spirits and the impact of AI," Golub wrote. "However, our work indicates that surging earnings momentum (change in forward growth projections) fueled this upside. Unfortunately, this momentum is collapsing."
The chart below highlights Golub's point.
Consensus estimates from FactSet show earnings for those five companies are set to end the year with just shy of 20% year-over-year earnings growth in the fourth quarter, reflecting significantly slower growth than their prior pace. By that point, consensus expects the other 495 companies to be growing earnings by about 17% compared to the year prior, a significant uptick from their current growth rate.
"Our downgrade of the Big 6 — from Overweight to Neutral — is not predicated on extended valuations, or doubts about AI," Golub wrote. "Rather, it is an acknowledgment of the difficult comps and cyclical forces weighing on these stocks. These forces do not apply to other TECH+ companies or the rest of the market in the same way."
- Ines Ferré
Trending tickers on Monday
Tesla (TSLA)
Tesla shares fell as much as 4% on Monday after the EV maker cut the price of its vehicles in China amid a continuing industry price war.
Chinese auto manufacturers have been offering what some note as more affordable options on average than their US counterparts.
Verizon (VZ)
Telecom giant Verizon reported mixed first quarter earnings results while reaffirming its full-year guidance.
The company posted a lower-than-expected loss in postpaid phone connections. Verizon reported a loss of 68,000 postpaid phone subscribers during the quarter, beating the 100,000 subscriber loss anticipated by analysts.
Verizon shares declined as much as 4%, reversing earlier opening gains.
Salesforce (CRM)
Shares of Salesforce (CRM) rose on Monday after Informatica (INFA) announced it is not in talks to be acquired by the cloud-based software company. Informatica was responding to a Wall Street Journal report which stated Salesforce was in talks to buy the data development firm for roughly $10 billion.
“Although Informatica’s policy is not to comment on market rumors or media speculation, the Company announced that it is not currently engaged in any discussions to be acquired,” said the company in a statement on Monday morning ahead of its earnings report next week.
Shares of Informatica fell as much as 8%.
- Ines Ferré
The bipartisan worry that is uniting Washington: Cheap Chinese goods
Yahoo Finance's Ben Werschkul reports:
For all the differences between Joe Biden and Donald Trump, they share a bipartisan worry about China flooding global markets with cheap goods.
President Biden's recent call for a tripling of tariffs on Chinese steel was just the latest example of how voters will have a choice this fall that is one of degree as opposed to changes in direction when it comes to China trade.
Both camps are lining up behind increasingly protectionist plans.
Biden is calling for tariff hikes on select Chinese sectors. Trump wants 60% tariffs across the board. Biden is looking to "de-risk" the relationship with China while Trump talks about "de-coupling" the world's two largest economies.
Much of the reason for the US focus on the issue is, of course, the ongoing debate about the proposed $14 billion sale of US Steel (X) to Japanese giant Nippon Steel. Both Biden and Trump are opposed to that deal and it's another front where usual partisan alliances have been scrambled.
Read more here.
- Ines Ferré
Nasdaq hugs flatline as Big Tech stocks mixed
The Nasdaq Composite (^IXIC) briefly dipped below the flatline on Monday after rising as much as 0.9% earlier in the session.
The tech-heavy index tried to rebound after falling more than 2% on Friday. Nvidia (NVDA) shares pared earlier gains to rise more than 1.5%. The AI darling dropped 10% on Friday.
Tesla (TSLA) shares fell more than 4% after the EV maker cut the price of its vehicles in China. Tesla will report earnings on Tuesday after the closing bell. Monday marked the seventh consecutive session of declines for Tesla.
Meta (META) shares declined more than 1% as investors await the social media giant's earnings release later this week. Shares of software giant Microsoft (MSFT) also fell slightly.
Amazon (AMZN), Alphabet (GOOGL), and Apple (AAPL) all rose fractionally.
- Ines Ferré
Gold drops 2% as concerns of broader Middle East conflict ease
Gold (GC=F) sank more than 2% amid easing concerns of a broader war in Middle East.
"The gold market experienced a strong decline today, as fears surrounding a wider conflict in the Middle East eased, reducing the need for investors to seek safe-haven assets like gold," George Khoury, Global Head of Education and Research at CFI, said on Monday.
"However, geopolitical concerns could remain an important driving force for gold," he added.
Last week Israel struck Iran in retaliation to Tehran's attack on Israeli government targets. Both countries appeared to be contained with limited damage.
Gold has climbed for five consecutive weeks and hit all-time highs above $2,400 per ounce in April.
On Monday, futures hovered around $2,350 per ounce.
- Ines Ferré
Nvidia stock rebounds 3%, Tesla shares extend decline
Nvidia (NVDA) shares led a rebound in Big Tech stocks on Monday as the broader market attempted to recover from last week's losses.
Nvidia rose more than 3% following a 10% drop on Friday when a sell-off in technology stocks led to steep declines on the Nasdaq Composite (^IXIC) and S&P 500 (^GSPC).
On Monday, the S&P 500 rose 0.5% in an attempt to snap a six-day losing streak.
Meanwhile, Tesla (TSLA) shares were down roughly 2% at around 10 a.m. ET as investors reacted to the EV maker's price cuts on its vehicles in China. Monday marked the seventh consecutive session of declines for Tesla.
- Ines Ferré
Stocks attempt recovery with Big Tech earnings ahead
Stocks opened higher on Monday, following their worst week of the year, as investors await a flood of earnings.
The S&P 500 (^GSPC) moved up 0.5%, rising back above the 5,000 level. The Dow Jones Industrial Average (^DJI) also gained 0.5%, while the tech-heavy Nasdaq Composite (^IXIC) was 0.6% higher.
Tech stocks looked to recover from a sharp decline on Friday in reaction to lackluster earnings from Netflix (NFLX) and a 10% drop in shares of AI darling Nvidia (NVDA)
Monday's focus is on Tesla (TSLA) as the EV maker said it has cut prices in the US, China, and several other countries. Shares of the EV maker fell more than 4% in early trading. Tesla will report quarterly results on Tuesday after the market close.
Other highly anticipated quarterly results this week include Meta (META), Microsoft (MSFT) and Alphabet (GOOG).
- Brian Sozzi
Reminder on Nvidia after Friday's beating
Tough session for Nvidia (NVDA) on Friday — shares lost 10%!
The stock is now down 25% from its March 25 highs.
Who knows whether this is the bottom, as the entire AI trade is under pressure amid more cautious sentiment.
But what I do know is that Nvidia is fundamentally strong and likely to be defended on the Street soon due to the sell-off.
Good point here from Evercore ISI's Mark Lipacis in a new note that underscores the point:
"We think investors underestimate 1) the importance of the chip+hardware+software ecosystem that Nvidia has created, 2) that computing eras last 15-20 years and are typically dominated by a single vertically integrated ecosystem company, whose returns are measured in 100-to-1000 bagger range."
And another good point on Nvidia's sell-off from Freedom Capital chief global strategist Jay Woods on Opening Bid this morning (episode down below):
"These things happen, and people get emotional with this stock — but I think this is a great opportunity for those waiting for that dip in a stock that continues to crush it in each earnings cycle and in the hottest space to dip their toe in the water."
Watch Yahoo Finance's new vodcast, Opening Bid, on Monday and Friday at 8 a.m. ET on Yahoo Finance, YouTube, and podcast platforms Spotify and Apple Music.
