A trader on the floor of the New York Stock Exchange at the opening bell on May 6, 2025.
Timothy A. Clary | Afp | Getty Images
The S&P 500 moved higher on Monday as optimism around earnings overshadowed any investor fears over the latest developments in trade.
The broad market index rose 0.14% and closed at 6,305.60 — marking the first time it ended a session above the 6,300 threshold. The Nasdaq Composite jumped 0.38% for a closing record of 20,974.17. Both indexes hit new all-time intraday highs earlier in the session, bolstered by advances in major technology names like Meta Platforms and Amazon. The Dow Jones Industrial Average slipped 19.12 points, or 0.04%, and settled at 44,323.07.
This comes as earnings season is off to a strong start. Verizon shares popped 4% following a second-quarter earnings beat, spurring excitement that other reports will come in strong. It joins 62 S&P 500 companies that have reported thus far. Of those, more than 85% have topped expectations, according to FactSet data. Earnings for the second quarter are also tracking 5% year-over-year growth following the first week of results, per Bank of America.
Alphabet was a standout in the session, increasing more than 2% ahead of its quarterly results Wednesday after the bell. That name as well as Tesla — the first of the “Magnificent Seven” companies set to report — could boost the major averages if they manage to beat estimates. Shares of the electric vehicle maker ended the session marginally lower.
The megacaps are expected to be a major driver of earnings growth during the second-quarter earnings season, and FactSet’s John Butters expects the “Magnificent Seven” to post earnings growth of 14% in the second quarter compared to the other 493 S&P 500 companies that are seen posting growth of just 3.4%.
Confidence toward this earnings season was in focus among investors, even as the White House reiterated its position on tariffs over the weekend. On Sunday, U.S. Commerce Secretary Howard Lutnick called Aug. 1 the “hard deadline” for countries to start paying tariffs, though he also added 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,” Sam Stovall, chief investment strategist at CFRA Research, told CNBC. “That is encouraging for the market as well.”
More broadly, Stovall pointed out that the market is doing “what it normally does,” revealing that it tends to advance on average about another 10% after recovering all of its losses from a decline of up to 20%. With that, he thinks the S&P 500 could reach 6,600 before slipping into a new decline, which implies upside of about 4.7% from Monday’s closing level.
“A lot of the negativity has typically been shaken out of the market during these corrections, and now we’re seeing articles about maybe the economy is not as bad as we thought it was, consumer confidence is on the mend and we’re not seeing the inflation numbers be adversely affected by tariffs,” Stovall continued. “Maybe it’s just a matter of time before those things kick in, but at least for now, I think investors are saying, ‘You know what, the market is indicating that it wants to go higher.'”
