US stocks rose on the first trading day of the month as attention turned to this week's heavy slate of earnings reports.
The S&P 500 Index closed 1.5% higher, close to a record high, while the Nasdaq 100 Index advanced 1.8%. The Philadelphia Semiconductor Index, known as the SOX, added 1.1%.
US stocks had closed out July with a gain on Friday, as Amazon.com Inc.'s 15% rally after strong results lifted a broad sweep of companies benefiting from demand for artificial intelligence. Amazon added 4.6% on Monday to close at a record, becoming only the fifth company to ever cross the $3 trillion market-cap threshold.
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Slumping oil prices also contributed to broadly positive sentiment on Monday. West Texas Intermediate crude fell 5.3% to trade around $80 after President Donald Trump called off a planned attack on Iran, and both the US and Iran signaled talks to restore shipping through the Strait of Hormuz were ongoing. The fastest US manufacturing activity expansion in more than four years also lifted stocks.
"Earnings will remain the primary focus, with roughly 15% of the S&P 500 by market capitalization scheduled to report," Matt Orton, Raymond James Investment Management Chief Market Strategist, said. He flagged energy, healthcare, utilities and industrials as sectors to watch, as they've "benefited from the recent rotation." Their "results will help determine whether that relative strength is fundamentally sustainable," he said.
Results from data-mining software developer Palantir Technologies Inc. were due after the close. The company was expected to post a 143% rise in net income for the second quarter on an 80% leap in revenue. Shares closed with a 2.1% gain. They're down some 40% since hitting a peak in November.
| "We count 95 tech earnings this week across the US with more than $1 billion in market cap," Jefferies equities trader Jeffrey Favuzza wrote in a note. Along with Palantir, ON Semiconductor Corp. is the main focus, he said. Of the 307 S&P 500 companies that have reported so far this season through the close on Friday, 86% beat analysts' forecasts for EPS. On sales, 68% of companies have positively surprised, while 15% missed. SpaceX's inaugural report as a public company is due on Tuesday. SpaceX has also set the stage for one of the largest share unlocks in capital markets history, with as much as $116 billion worth of stock becoming eligible for sale for the first time next month. Elon Musk's company has fallen below its IPO price, closing on Monday at $114.46. ALSO READ: Chip Selloff Deepens: SK Hynix, Micron, AMD Slump Up To 5% Even As Wall Street Rallies In other AI news, Alibaba Group Holding Ltd. ADRs rallied 4.1% after the compny released its biggest-ever AI model, claiming performance on par with global leader Anthropic PBC in the latest Chinese challenge to US rivals. Potential Federal Reserve moves are also drawing investor attention. Chairman Kevin Warsh faces lingering questions about the central bank's credibility, Wolfe Research economist Stephanie Roth wrote in a Monday note. Last week, asset moves signaled investors were growing increasingly concerned that Warsh won't manage to rein in inflation that's run above the Fed's target for five straight years. "The data may yet bail him out," which is Roth's base case, while the upcoming Jackson Hole conference "offers a reset," she said. Sectors in Focus
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