U.S. stocks rose on Monday, buoyed by strong earnings from electric car maker Tesla ahead of the upcoming Federal Reserve meeting.
Additionally, last week’s strong first-quarter earnings from tech giants Alphabet (GOOGL) and Microsoft (MSFT) sparked a tech industry rally, with momentum expected to continue this week.
Earnings season continues
This Monday marked the continuation of the quarterly earnings season, with more significant results anticipated in the days ahead.
Domino’s Pizza (DPZ) shares rose 7% after the company, one of the largest pizza chains in the market, beat sales forecasts for its first quarter, supported by its customer loyalty programs.
SoFi Technologies (SOFI) shares plunged more than 8% after the company forecasted a weak second quarter, even though it reported better-than-expected revenue and profit last quarter, buoyed by its financial services segments.
Amazon (AMZN), Coca-Cola (KO), Advanced Micro Devices (AMD), and Eli Lilly (LLY) will report their results on Tuesday.
Additionally, Tesla (TSLA) shares soared nearly 11% after The Wall Street Journal reported the company received tentative permission from the Chinese government to launch its driver-assistance software. This system leverages mapping and navigation technology from tech giant Baidu (BIDU).
Federal Reserve meeting in the spotlight, as estimates of a rate cut diminish
However, market activity is expected to remain robust in the first half of this week, leading up to the Fed meeting.
The Fed is expected to leave interest rates unchanged in May. Furthermore, with persistent inflation and sluggish U.S. consumer spending, most analysts now believe rate cuts will not commence until at least September or the fourth quarter.
Friday’s release of the PCE price index, the Fed’s preferred inflation gauge, showed a March reading higher than expected, intensifying concerns that the Fed is hesitant to start cutting interest rates and suggesting that rates may remain higher for longer.
