Stock market today: Dow climbs as earnings season set to ramp up

By Yasin Ebrahim 

Investing.com -- The Dow closed higher Monday, as big tech and chip stocks were in favor ahead of a busy week during which mega-cap tech including Microsoft and Intel (NASDAQ:INTC) kick off earnings for tech.    

The Dow Jones Industrial Average gained 0.8%, or 254 points, the S&P 500 rose 1.2%, and the Nasdaq Composite was up 2%.

Big tech picked up from where it left off, starting the week on the front foot as investor optimism on the sector ratchets up ahead of notable quarterly reports. Microsoft Corporation (NASDAQ:MSFT), which announced a further investment in Open AI on Monday, is to report quarterly results on Tuesday during a busy week of earnings with about 89 S&P 500 companies set to report. 

Quarterly results from Microsoft are expected to reflect the impact of slowing demand, though recent cost-cutting measures including layoffs could soften the blow. 

“At this point, we see risk to prior FY23 guidance for commercial revenue to expand ~20% y/y at constant currency and total revenue grow double-digits y/y  at constant given a more cautious outlook,” Deutsche Bank said in a note.

Salesforce (NYSE:CRM), meanwhile, rallied 3% on news that investor Elliott Management has taken a stake in the business software firm.

Chip stocks also played a heavy role in the rally after Barclays delivered bullish remarks on the industry as demand from AI applications such as ChatGPT and the China reopening is expected to stoke demand.

Advanced Micro Devices  (NASDAQ:AMD) was upgraded by Barclays to Overweight from Equal Weight, with a price target of $85, up from $70, sending the chipmaker’s share price up 9%. Barclays also upgraded Qualcomm Incorporated (NASDAQ:QCOM) and NVIDIA Corporation (NASDAQ:NVDA), pushing both shares more than 6% and 7% higher, respectively.

Western Digital (NASDAQ:WDC), meanwhile, was also a major mover on reports the company is set to consolidate operations, spinning off its flash business and merging it with Kioxia in a separate public company.

Energy stocks lagged the broader market move higher, weighed down by a 1% fall in Baker Hughes Co (NASDAQ:BKR) after the oil field services reported quarterly results that fell short of estimates on both the top and bottom lines.

In other news, Spotify Technology SA (NYSE:SPOT) rose more than 2% after the music streaming giant announced plans to cut 6% of its global workforce. Chief executive Daniel Ek issued a mea culpa, admitting the firm had made investments that were too ambitious compared with revenue growth.