U.S. equities experienced an uptick on Monday as market commenced a new month of trading, with investors focusing beyond the recent declines in silver and bitcoin. The Dow Jones Industrial Average increased by 515.19 points, reflecting a rise of 1.05%, and concluded at 49,407.66. Meanwhile, the S&P 500 experienced an uptick of 0.54%, finishing at 6,976.44. The Nasdaq Composite recorded an increase of 0.56%, closing at 23,592.11. Bitcoin has fallen beneath $80,000 for the first time since April, indicating that investors are reducing their exposure following the significant downturns in gold and silver observed on Friday. Silver, having more than doubled in value over the past year, experienced a significant decline of approximately 30% on Friday. The metal experienced its most significant decline in a single day since 1980. On that day, gold futures experienced a decline of approximately 11%.
The cryptocurrency and the two metals subsequently rebounded from their respective lows on Monday, contributing to a reduction in losses in equities and alleviating risk-off sentiment. Bitcoin was last observed at approximately $78,000, whereas spot gold and spot silver experienced declines of 4% and 5%, respectively. The Bitcoin proxy strategy experienced a decline, decreasing by 6.7%. Market shifted its focus to Nvidia amid rising inquiries regarding the artificial intelligence sector. It is reported, referencing sources with knowledge of the situation, that Nvidia’s intention to invest $100 billion in OpenAI has encountered delays, as executives from the chipmaker have voiced skepticism regarding the agreement. Nvidia shares experienced a decline of nearly 3%. “It appears to us that the larger trends, which are predominantly favorable, remain intact,” stated Tim Holland. “At this moment, the focus remains on earnings, the supportive fiscal policy environment – which continues to be favorable despite the temporary shutdown – and seasonal trends.”
This week, over 100 companies within the S&P 500 are scheduled to release their earnings reports. That includes Amazon and Alphabet — both companies saw an increase in their shares on Monday. The overall reporting season has demonstrated strength to this point; however, notable post-earnings sell-offs have occurred, including that of Microsoft. Disney commenced this week by announcing earnings that surpassed analyst forecasts. However, the stock experienced a decline of 7% following the company’s caution regarding challenges posed by international travelers visiting domestic parks.
Nonetheless, strategists observed this weekend that earnings growth is poised to be the most robust in four years. Currently, approximately one-third of S&P 500 companies have released their earnings reports, with around 78% surpassing analysts’ expectations, according to a source. “If you consider what has been concerning investors regarding domestic equity prices, it would be valuations, particularly at the higher end of the market,” Holland stated. “Double-digit earnings growth … for the fifth consecutive quarter would significantly alleviate the valuation concerns that have persisted over the past couple of years.”