Stocks gain as Fed rate hopes fuel continued rally

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Stocks rose Monday as Wall Street looked set to build on an end-of-week surge precipitated by a softer-than-expected jobs report that helped spur bets toward an earlier rate cut from the Federal Reserve.

The S&P 500 (^GSPC) gained 0.6% while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The Dow Jones Industrial Average (^DJI) increased roughly 0.2%.

Stocks rallied at the end of last week, getting a boost from a “Goldilocks” jobs report that struck the balance in providing welcome news for both the markets and the Fed. More than two-thirds of bets are now on a September rate cut from the Fed, according to the CME FedWatch Tool. Most traders now expect at least two cuts by the end of the year.

Those bets could be swung by the return of Fedspeak this week, now that free-speaking Fed officials are untethered from a pre-meeting blackout period.

On Monday, New York Fed president John Williams said officials will make rate cut decisions based on the totality of incoming data. Williams said eventually there will be rate cuts.

Also on Monday, Federal Reserve Bank of Richmond President Thomas Barkin expressed optimism that inflation will come down to 2% as “the full impact of higher rates is yet to come.” Minneapolis’s Neel Kashkari is set to speak on Tuesday.

In corporate news, Disney (DIS) will take center stage this week as earnings season starts to wind down. Its stock is up around 25% so far this year. Meanwhile, after a 6% post-earnings rally on Friday, Apple (AAPL) shares were down around 0.5% after Berkshire Hathaway CEO Warren Buffett revealed over the weekend the company had pared its holdings in the iPhone maker.

Live7 updates

  • Current rates should be enough to bring inflation down: Fed’s Barkin

    Yahoo Finance’s Jennifer Schonberger reports:

    Richmond Fed president Tom Barkin said Monday he is optimistic that the current interest rates will be enough to eventually bring inflation down, and that the Fed can afford to be patient due to a strong job market.

    “The recent data whiplash has only confirmed the value of the Fed being deliberate,” Barkin said in a speech at Columbia Rotary Club in South Carolina.

    “The economy is moving toward better balance, but no one wants inflation to reemerge.”

    Barkin’s comments come after inflation showed a lack of progress in the first three months of the year after a steady decline in the second half of last year.

    Read more here.

  • Boeing countdown to Starliner first crewed mission to ISS

    Boeing (BA) shares were up more than 1% ahead of the industrial giant’s first planned astronaut launch to NASA’s International Space Station on Monday night at 10:34 PM Eastern.

    If the flight proves successful, it could pave the way for NASA to allow Boeing to conduct routine flights to and from the ISS for the agency. Boeing’s Starliner program has faced a series of setbacks and delays over the years. The Starliner space capsule failed to reach the ISS in 2019.

    Monday’s milestone comes amid an ongoing safety controversy and a leadership change at Boeing.

  • Trending tickers Monday

    Palantir Technologies (PLTR)

    Palantir stock rose more than 6% Monday morning to occupy the # 1 slot on Yahoo Finance’s trending ticker page of the software developer’s first-quarter earnings results due out after the market close. Analysts will be paying close attention to the company’s performance in its artificial intelligence platform (AIP) segment.

    Tyson Foods (TSN)

    Shares of Tyson Foods fell Monday despite reporting better-than-expected earnings for the second quarter. While the company beat revenue estimates, it missed on net sales due to a consumer spending slowdown and issues stemming from the company’s chicken production operations.

    Disney (DIS)

    Disney is set to deliver its quarterly results on Tuesday prior to the market open. The print will be the first results released since the media conglomerate won its proxy fight with Nelson Peltz last month. Investors will be watching for subscriber growth in streaming services, parks attendance, and Disney’s read on the summer box office.

  • Robinhood gets new legal threat from SEC as crypto crackdown continues

    Yahoo Finance’s David Hollerith reports:

    Robinhood (HOOD) said it received a Securities and Exchange Commission warning that the trading platform could face an enforcement action related to its US crypto business.

    The so-called “Wells notice” that Robinhood received May 4 stated that the SEC’s staff made a “preliminary determination” to recommend the the action due to violations of registrations as a securities broker and transfer agent.

    Its stock, however, rose more than 1% in early morning trading Monday after dropping by as much as 7% before the market open.

    Robinhood warned in its disclosure that a potential action from the SEC could mean a civil complaint and a public court proceeding that could end in a fine, a cease-or-desist order and other limitations on its crypto activities.

    The SEC has gone after a number of firms that let US customers trade cryptocurrencies, as part of a wide-ranging crackdown on the industry. Read more here.

  • Energy stocks lead gains as oil edges higher

    Energy-related stocks gained Monday as oil inched higher. The S&P 500 Energy Sector Select ETF (XLE) rose more than 1%, leading the overall market gains.

    Crude futures rose on renewed geopolitical tensions and after Saudi Aramco increased its prices for Asian customers, signaling tight supply.

    West Texas Intermediate (CL=F) rose less than 1% to hover above $78 per barrel. Brent, the international benchmark price, also gained (BZ=F) to trade above $83 per barrel.

    Last week, oil fell more than 6% amid diplomatic efforts for a ceasefire between Hamas and Israel. By Monday, that prospect had dimmed.

    “I believe we have seen some major liquidation in the crude space from hedge funds and therefore, more buying power could be on the sidelines if we get renewed Geopolitical fears,” Dennis Kissler, senior vice president at BOK Financial, said in a note to clients on Monday.

  • Stocks edge higher on hopes of Fed rate cuts this year

    Stocks opened higher on Monday as Wall Street looked set to continue the market’s surge on Friday on bets the Federal Reserve will cut rates this year amid a softening job market.

    The S&P 500 (^GSPC) gained 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.3%. The Dow Jones Industrial Average (^DJI) rose more than 0.4%.

    In corporate news, Disney (DIS) will report quarterly results this week, as earnings season starts to wind down.

    Apple (AAPL) shares opened slightly lower Monday after Berkshire Hathaway CEO Warren Buffett revealed over the weekend the company had pared its holdings in the iPhone maker. Apple stock gained more than 6% on Friday in reaction to the company’s quarterly results and historic share buyback announcement.

    RobinHood (HOOD) revealed it received a “Wells Notice” from the Securities and Exchange Commission (SEC) informing the trading platform of potential securities violations related to crypto trading.

  • Monday’s quick earnings primer

    Via the Yahoo Finance Morning Brief newsletter (sign up here), here’s a quick glance at the biggest companies reporting earnings today:

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