The stock market moved lower on Monday—extending a recent losing streak—while rates surged ahead of a big week of quarterly earnings results, with investors remaining nervous about the impact of surging inflation on corporate profits and consumer spending.
Stocks added to last week’s losses, despite a comeback late in the day: The Dow Jones Industrial Average fell 0.1%, less than 100 points, while the S&P 500 was flat and the tech-heavy Nasdaq Composite lost 0.1%.
Government bond yields climbed higher yet again on Monday, with the closely watched ten-year Treasury note spiking up to 2.88%—its highest level since 2018, after having traded at less around 1.7% just two months ago.
Despite a decent start to earnings season, with roughly 79% of the 38 companies in the S&P 500 that have reported results so far beating estimates, investor uncertainty remains high, with inflation, rising rates and the war in Ukraine both weighing on markets.
Wall Street experts are now increasingly warning that quarterly earnings are likely to take a hit, as surging inflation leads to rising costs, which will impact both corporate profit margins and consumer spending.
Shares of brokerage Charles Schwab fell over 10% on Monday after disappointing quarterly earnings, while Bank of America, meanwhile, reported results that came in slightly above expectations, with its stock rising over 3%.
Shares of Twitter jumped over 7% on Monday as tensions heated up between the company’s board of directors and Tesla billionaire Elon Musk, who last week launched an unsolicited $43 billion offer to buy the social media platform. The stock’s gains on Monday come after Twitter’s board announced late on Friday that it would adopt a “poison pill” plan to resist any hostile takeover attempt.
What To Watch For
A host of big names will report first-quarter earnings this week, including the likes of Netflix on Tuesday, Tesla on Wednesday and Snap on Thursday. Several airlines—such as United and American—also report this week, as well as Dow stocks like IBM, Procter and Gamble and American Express.
Recession Calls Grow As Inflation Threatens Corporate Earnings And Rising Costs Hit Consumers (Forbes)
Twitter Board Adopts Poison Pill To Fend Off Elon Musk’s Takeover Bid (Forbes)
Musk Says He Has ‘Sufficient Funding’ To Buy Twitter, Claims He Has ‘Plan B’ If Offer Is Rejected (Forbes)
Experts Believe Inflation May Have ‘Peaked,’ But Prices Will Remain Elevated This Year (Forbes)