The S&P 500 experienced an upward movement on Monday, driven by a prevailing optimism regarding earnings that eclipsed any investor concerns related to the most recent trade developments. The broad market index experienced an increase of 0.14%, concluding the session at 6,305.60. This marks a significant milestone as it is the first occasion the index has closed above the 6,300 level. The Nasdaq Composite experienced an increase of 0.38%, culminating in a closing record of 20,974.17. Both indexes reached new all-time intraday highs earlier in the session, supported by gains in significant technology firms such as Meta Platforms and Amazon. The Dow Jones Industrial Average experienced a decline of 19.12 points, representing a decrease of 0.04%, ultimately closing at 44,323.07.

This development occurs as the earnings season begins with robust performance. Verizon experienced a notable increase of 4% in its shares after surpassing expectations in its second-quarter earnings report, generating optimism regarding the potential strength of forthcoming reports. It aligns with the 62 companies within the S&P 500 that have reported their results to date. Among those, over 85% have exceeded expectations, as indicated by FactSet data. Earnings for the second quarter are currently reflecting a 5% year-over-year growth, as indicated by the initial week of results from Bank of America.

Alphabet exhibited notable performance in the session, rising over 2% in anticipation of its quarterly results scheduled for release Wednesday after market close. The performance of that name, along with Tesla, which is among the first of the “Magnificent Seven” companies scheduled to report, has the potential to enhance the major averages if they exceed expectations. The shares of the electric vehicle manufacturer concluded the trading session with a slight decline. The large-cap companies are anticipated to significantly contribute to earnings growth in the upcoming second-quarter earnings season. According to FactSet’s John Butters, the “Magnificent Seven” are projected to achieve an earnings growth rate of 14% in the second quarter, in contrast to the remaining 493 S&P 500 companies, which are expected to see a modest growth of only 3.4%.

Investor sentiment regarding the upcoming earnings season was a primary concern, particularly in light of the White House’s reaffirmation of its stance on tariffs over the weekend. On Sunday, U.S. Commerce Secretary Howard Lutnick designated Aug. 1 as the “hard deadline” for countries to commence tariff payments, while also noting that “nothing stops countries from talking to us after Aug. 1.” “Rarely do you injure yourself falling out of a basement window.” “With expectations so low in earnings, I think that the end result will end up being better than anticipated,” stated Sam Stovall, chief investment strategist at CFRA Research, in an interview with CNBC. “This is a positive indicator for the market as well.”

Stovall highlighted that the market is exhibiting typical behavior, indicating that it generally progresses by an additional 10% on average following a recovery from a decline of up to 20%. He posits that the index could ascend to 6,600 before entering a new downturn, suggesting an upside potential of approximately 4.7% from Monday’s closing level. “A significant portion of the pessimism has generally been purged from the market during these corrections, and currently, we are observing discussions suggesting that the economy may not be as dire as previously assumed, consumer confidence is improving, and inflation metrics are not being negatively impacted by tariffs,” Stovall continued. “Perhaps it is merely a question of time until those factors take effect, but for the moment, it appears that investors are expressing, ‘You know what, the market is signaling a desire to ascend.’”