NEW YORK — Stocks shook off an early bout of unsettled trading and ended higher ahead of a heavy week of earnings from big tech companies. Alphabet, Amazon, Apple and Facebook parent Meta are all reporting their latest results this week, as are Coca-Cola and General Motors. The S&P 500 rose 1.2% Monday. The Nasdaq and the Dow Jones Industrial Average also rose. Markets in Europe gained ground and U.K. government bonds rallied as Treasury chief Rishi Sunak became assured of becoming the prime minster, replacing Liz Truss, who quit last week after her tax-cutting economic package caused turmoil in financial markets.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks shook off an early bout of unsettled trading and marched higher Monday ahead of a heavy week of earnings from big tech companies.
The S&P 500 rose 1.3% as of 2:48 p.m. Eastern. The Dow Jones Industrial Average rose 479 points, or 1.5%, to 31,560 and the Nasdaq rose 0.7%
Bond yields eased back from their multi-year highs. The yield on the 10-year Treasury fell to 4.23% after moving as high as 4.28% earlier Monday. It reached 4.22% late Friday.
Google’s parent company, along with Facebook’s parent, Amazon and Apple are all reporting their latest financial results this week. They are among the priciest stocks in the benchmark S&P 500 and their earnings this week could mean big moves, up or down, for the broader market.
Several big companies outside of the tech sector are also reporting earnings this week, including Coca-Cola, General Motors and Caterpillar.
“In general, the market is sitting back and there are a few data points people are waiting to see,” said Jack Janasiewicz, portfolio manager and lead portfolio strategist at Natixis Investment Managers Solutions.
Investors are closely reviewing the latest round of corporate earnings to get a better picture of inflation’s impact on different areas of the economy. Prices on everything from clothing to food remain at their highest levels in four decades. That has put pressure on companies to raise prices and cut costs, while squeezing consumers.
The Federal Reserve and central banks around the world have been raising interest rates in an effort to tame inflation. Interest rate increases have been weighing on pricier stocks, like technology companies, by making less-risky bonds seem more attractive in a volatile stock market.
Higher interest rates have also made borrowing more expensive and have hit the housing market particularly hard. Mortgage buyer Freddie Mac reported on Thursday that the average on the key 30-year rate ticked up to 6.94%. Last year at this time, the rate was 3.09%. The surge in mortgage rates has stalled a housing sector that has been hot for years.
The Fed’s aggressive rate increases have economists and investors worried that the central bank could go too far in slowing the economy and push it into a recession. The U.S. economy is already slowing down and actually contracted during the first half the year. The government will release its third-quarter gross domestic product report on Thursday.
The Fed is expected to raise interest rates another three-quarters of a percentage point at its upcoming meeting in November. Markets have been looking for any sign that the central bank is ready to ease up on rate increases.
“The market needs to find that terminal rate,” Janasiewicz said. “Once we get comfortable with that, I think we can start to find some footing.”
Markets in Europe made solid gains. U.K. government bonds rallied as Treasury chief Rishi Sunak became assured of becoming the prime minster, replacing Liz Truss, who quit last week after her tax-cutting economic package caused turmoil in financial markets.
Markets in China tumbled after President Xi Jinping awarded himself another term as leader of the ruling Communist Party. The news roiled U.S. listed shares of some big Chinese companies. Alibaba slumped 13.9% and JD.com fell 13.4%.
Xi wants a bigger Communist Party role in China’s business and technology development, raising fears about stunted economic growth because of too much centralized control. China’s economy is also still hurting from strict COVID-19 restrictions.
Yuri Kageyama and Matt Ott contributed to this report.