Traders work on the floor of the New York Stock Exchange (NYSE), July 26, 2023.
Brendan McDermid | Reuters
Stock futures were roughly flat Monday night.
Earnings season continued, shaking up select names in after-hours trading. Palantir Technologies added more than 2% after the company posted a 13% increase in second-quarter revenue. Educational tech company Chegg popped about 24% after reporting second-quarter revenue of $183 million, beating analysts’ estimate of $177 million, per Refinitiv.
During Monday’s regular session, the 30-stock Dow surged more than 400 points, or nearly 1.2%, for its best day since June 15. The Nasdaq Composite added 0.6%, and S&P 500 closed higher by 0.9%. The tech-heavy Nasdaq and the broad-market index broke four-straight sessions of losses.
The corporate earnings season has so far been better-than-expected. Roughly 85% of S&P 500 stocks have reported quarterly results, and nearly 80% of them have beaten Wall Street’s expectations, according to FactSet.
“The good news is that the earnings trough/recession is likely coming to an end, with earnings growth expected to accelerate over the coming quarters,” said Dylan Kremer, co-chief investment officer at Certuity. “Looking ahead, earnings projections seem a bit lofty to us relative to revenue growth estimates, particularly starting in Q1/24.”
On the economic data front, traders are looking ahead to July’s consumer price index report, out Thursday. The inflation metric could put Wall Street’s belief in a soft landing to the test. Economists polled by Dow Jones are calling for a monthly increase of 0.2% in July and a year-over-year rise of 3.3%.