Overview:
On Monday, April 28, the U.S. stock market ended with a modest gain, as the S&P 500 eked out a slight increase amidst a volatile session. Investors awaited key economic data and the earnings reports of major U.S. companies, particularly those of megacap stocks. The S&P 500 rose by 0.06%, while the Nasdaq Composite fell by 0.10%, with Nvidia and Amazon being the main contributors to the market’s mixed performance.
The latest developments include news from the Wall Street Journal reporting that Huawei Technologies is testing its AI processor aimed at competing with Nvidia’s high-end products, adding to market uncertainty. Despite the mixed earnings results from large companies, investors remained focused on the earnings season and the potential implications of trade tariffs on corporate profits.
Fear & Greed Index:
Neutral – Investors are balancing mixed earnings reports and geopolitical risks, particularly concerning trade policy and potential tariff impacts on major corporations.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: +0.28% at 40,227.59
- S&P 500: +0.06% at 5,528.75
- Nasdaq Composite: -0.10% at 17,366.13
Sector Performance:
Winners:
- Aerospace/Defense: Boeing rose 2.4% following an upgrade in its stock rating and price target by Bernstein, helping to buoy the Dow Jones Industrial Average.
- Technology: Apple (+0.4%) and Meta (+0.5%) posted gains as part of the ongoing earnings season, offsetting declines in Nvidia and Amazon.
Losers:
- Technology: Nvidia dropped 2.1%, while Amazon declined by 0.7%, after concerns arose from Huawei’s potential challenge to Nvidia’s market share in AI processors.
- Consumer Discretionary: General caution regarding tariffs and trade policy led to mixed results across the retail and consumer sectors.
Key Movers:
- Nvidia (NVDA): Fell 2.1% after a report that Huawei is preparing a new AI chip, posing a threat to Nvidia’s dominance in the space.
- Amazon (AMZN): Dropped 0.7% as part of broader weakness in megacap tech stocks amid concerns over competition in the AI sector.
- Boeing (BA): Gained 2.4% after an upgrade from Bernstein, driven by positive expectations regarding future contracts and earnings growth.
- Spirit AeroSystems (SPR): Rose 2.6% following a deal with Airbus to take over some of Spirit’s manufacturing plants.
Economic Data:
- Earnings Reports: Investors are closely following the earnings season, with 180 S&P 500 companies set to report this week. Among the key companies reporting are Amazon, Apple, Meta, and Microsoft. Analysts are watching for guidance on how U.S. trade policies, including tariffs, may impact future profits.
- Personal Consumption Expenditures (PCE): Investors are awaiting the PCE price index, a critical inflation measure, as well as labor market data culminating in Friday’s monthly payrolls report.
Outlook:
The market remains volatile, with mixed earnings reports from major companies and ongoing concerns over trade policy, especially regarding U.S.-China relations. The earnings season, combined with key economic data, will likely dictate short-term market movements. Investors are particularly focused on potential tariff impacts, especially in the technology and consumer sectors. The upcoming payrolls report on Friday will be crucial in determining the health of the U.S. labor market and influencing the Federal Reserve’s monetary policy decisions.