S&P 500 rallies as tech shines ahead of busy earnings week

By Yasin Ebrahim 

Investing.com -- The S&P 500 jumped Monday, as investors continued to pile into tech stocks ahead of a busy week of earnings.

The S&P 500 rose 1.1%, the Dow Jones Industrial Average gained 0.7%, or 240 points, and the Nasdaq Composite was up 1.9%.

Apple Inc (NASDAQ:AAPL) led the run-up in big tech, rising more than 3%, followed by Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT), with them set to kick off earnings for tech on Tuesday.

Quarterly results from Microsoft, which announced a further investment in Open AI on Monday, are expected to reflect the impact of slowing demand, though recent cost-cutting measures including layoffs are expected to help.

“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 6% 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 7%. Barclays also upgraded Qualcomm Incorporated (NASDAQ:QCOM) and NVIDIA Corporation (NASDAQ:NVDA), pushing both shares more than 7% and 6% 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 separately 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 investments that were too ambitious compared with revenue growth.