The Dow Jones Industrial Average and S&P 500 hovered near records on Monday as investors wait for gains from corporate heavyweights, including big tech, and a Fed meeting this week.
The earnings pipeline could set the tone, analysts said, but investors will also focus on China and the US as tensions mount between the world's two largest economies.
What do major indices do?
The Dow Jones Industrial Average
rose 51 points, or 0.1%, to 35,111 after switching between small wins and losses.
The S&P 500
rose 5 points, or 0.1%, to 4,416.
The Nasdaq Association
lost 8 points, or 0.1%, to trade at 14,828.
US benchmarks rebounded sharply last week from a July 19th slump to record highs by the end of Friday. The S&P 500 rose 2% on Friday to hit its 40th record high in 2021, and the tech-heavy Nasdaq Composite rose 2.8%. The Dow also hit a record close on Friday, surpassing the 35,000 milestone for the first time.
What is driving the market?
The Dow and S&P 500 rose slightly on Monday afternoon after investors waited for a softer sentiment in global equity markets to hear big tech companies' C-suites predict their expectations for the remainder of 2021.
"This week is all about earnings," said John Carey, director of equity income for Amundi U.S. adding that investors will be excited to see what executives have to say about their expectations for the second half of the year.
"I think investors will also be especially attuned to whatever management has to say about inflation, cost pressures and margin prospects, due to the potential for rising labor costs and other inputs," he told MarketWatch.
The results are expected this week by major tech companies, including Alphabet Inc.
and Microsoft Corp.
Result preview: Apple, Microsoft, Google, Facebook, Amazon and Tesla are the headlines of the biggest earnings week
"The earnings season is now in full swing and continues to surprise positively as most companies report better than expected sales and bottom line results," said Peter Cardillo, chief market economist at Spartan Capital Securities, in a note.
The US earnings calendar also includes the electric vehicle maker Tesla Inc.
which reported after close of trading on Monday.
"People aren't determined to jump in front of the big wins we have for this week," said Robert Pavlik, a senior portfolio manager at Dakota Wealth Management. “Profit is not the problem. It's the market's reaction to the profits. "
However, Pavlik also expects investors to focus on the outcome of the US Federal Reserve’s two-day monetary policy meeting, especially if the delta variant of the coronaviurs causing COVID-19 will eventually tighten the central bank’s plans to tighten its highly expansionary monetary policy begins to strain.
"If this trend continues this fall and winter with the COVID variant, the Fed may not be able to hike rates [in 2023] as much as it would like, unless the economy really picks up speed," he told MarketWatch.
Do not miss: Stagflation is “a legitimate risk” that would be painful for US markets
The Fed meets Tuesday and Wednesday. Policy makers are expected to discuss plans to slow the pace of the Fed's monthly bond purchases. But investors who expect clear answers to the crucial questions of when the tapering will begin and the pace of retreat are likely to be disappointed, economists said.
See: Tiptoe-fed this week to rejuvenate
In Washington, the Biden administration said Monday it was confident that despite setbacks over the weekend, a bipartisan infrastructure deal could still be worked out.
Global stocks in Europe and the UK closed slightly lower while the Hang Seng
slipped over 4% after China cracked down on both Tencent's music licenses and the entire education tutoring industry. Tencent music entertainment
Shares lost about 3.5% after falling as much as 14% in the lead up to launch.
U.S. government data on Monday showed U.S. new home sales fell 6.6% in June to an annualized rate of 676,000, the lowest since the first month of the COVID-19 pandemic in early 2020 when it was high Prices and limited choice seemed frustrating. Be a buyer.
Also read: Goldman Sachs lowers US growth prospects due to weaker service sector
Which companies are in focus?
Shares in Hasbro Inc.
rose 12.7% after the toy maker reported adjusted earnings more than double what it expected in the second quarter, with sales boosted by strong franchise brands and Wizards of the Coast and digital games.
and Willis Towers Watson PLC
announced a mutual agreement on Monday to end their $ 30 billion merger agreement and end litigation with the U.S. Department of Justice. Aon shares rose nearly 10% while Willis Towers Watson fell 8.6%.
Popular meme share AMC Entertainment Holdings Inc.
rose 7.5% and is well on its way to halting a three-day losing streak while GameStop Corp.
increased by 1.3%.
Otis Worldwide Corp.
Shares rose 0.7% after the elevator and escalator maker reported higher-than-expected earnings and sales in the second quarter, particularly in the new equipment business, while raising its full-year outlook.
Lockheed Martin Corp.
Shares fell 3.5% after the aerospace and defense company reported a second quarter profit that fell below expectations due to performance issues in the aviation industry, despite sales beating projections.
What are other markets doing?
Bitcoin BTCUSD rose nearly 22% on Monday after Amazon ran an ad looking for someone to lead the retailer's cryptocurrency efforts. In a separate report it says that Amazon wants to accept Bitcoins as a means of payment by the end of the year.
The yield on the 10-year government bond
was flat at 1.28%. Yields and bond prices move in opposite directions.
The ICE US dollar index
a measure of the currency against a basket of six major rivals, was 0.4% lower.
Oil futures traded lower against the US benchmark
down 0.1% while gold futures
closed 0.1% at $ 1,799.20 an ounce, the first settlement below $ 1,800 in nearly three weeks.
For European stocks, the Stoxx Europe is 600
closed 0.1% lower while the London FTSE 100
ended practically flat.
Steven Goldstein contributed to the coverage