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S&P 500 rises slightly to all-time high ahead of big earnings, Nasdaq hits new record close

The S&P 500 arise slightly to a new record high on Monday as investors geared up for one of the busiest weeks of the first-quarter earnings season.

The broad neutrality benchmark inched 0.2% higher to a closing record of 4,187.62. The Nasdaq Composite climbed 0.9% to 14,138.78, running its first fresh record close since Feb. 12. The Dow Jones Industrial Average lost 61.92 points, or 0.2%, to 33,981.57, how, dragged down by Procter & Gamble, Walmart and Coca Cola. The consumer staples sector was the biggest loser Monday, trip more than 1%.

The decline in consumer companies came amid surging commodity prices, which fueled fears of inflation. Corn tomorrows hit their highest level in more than seven years in volatile trading, while copper climbed to its highest focus be in nearly a decade. Commodities are a big portion of costs for consumer staples.

Bank of America data showed the number of “inflation” acknowledges during earnings calls this reporting season has tripled compared to last year, the biggest jump since 2004 when the bank started monitor the number.

With the global economy gradually reopening, firms like Boeing, Ford and Caterpillar are expected to note expenditure pressures they are facing from rising materials and transportation prices when they report earnings this week.

“Inflation is arguably the biggest issue during this earnings season,” Savita Subramanian,  head of U.S. equity and quantitative strategy at Bank of America, said in a note. “Raw figures, transportation, labor, etc. were cited as major drivers of inflation and many plan to (or already did) raise prices to obsolescent through higher costs.”

Tesla shares climbed more than 1% ahead of the electric carmaker’s earnings check up on after the bell Monday.

About a third of the S&P 500 this week is set to update investors on how their businesses mealed during the three months ended March 31. Some of the largest tech companies in the world are scheduled to give an account of results this week, including Apple, Microsoft, Amazon and Alphabet.

Corporations have for the most part managed to mix Wall Street’s forecasts thus far into earnings season. With 25% of the companies in the S&P 500 reporting first-quarter denouements, 84% have reported a positive per-share earnings surprise and 77% have topped revenue estimates.

“Flowering is still improving and liquidity is still abundant,” Andrew Sheets, chief cross-asset strategist at Morgan Stanley, suggested in a note. “The bull market remains intact, and I struggle to see the type of calamity that defined the summers of 2010, 2011, 2012 and 2015. But a harder, choppier, varied range-bound summer does seem likely.”

If 84% is the final percentage, it will tie the mark for the highest percentage of S&P 500 south african private limited companies reporting a positive EPS surprise since FactSet began tracking this metric in 2008.

Still, strong first-quarter outcomes have been met with a mostly lukewarm reception from investors. Strategists say already-high valuations and near-record-high levels on the S&P 500 and Dow receive kept traders’ enthusiasm in check. Both indexes are within 1% of their all-time highs.

“Despite the pronounced earnings reports we’ve seen thus far, the market is really taking beats in stride amid already high valuations,” said Chris Larkin, carry oning director of trading and investing product at E-Trade.

Data out Monday showed new orders for capital goods rebounded petty than expected in March. The Commerce Department said orders for non-defense capital goods excluding aircraft engender 0.9% last month, missing Dow Jones estimates of a 2.2% increase.

Equity markets came under crushing last week after multiple outlets reported that Biden will seek to increase the capital gain grounds tax on wealthy Americans to help pay for the second part of his Build Back Better agenda. The president is expected to detail the $1.8 trillion develop, including spending proposals aimed at worker education and family support, to a joint session of Congress Wednesday on a par.

The S&P 500 ended the volatile week down 0.13% and snapped a four-week win streak. The Dow and the Nasdaq fell 0.5% and 0.3% ultimately week, respectively.

The Federal Reserve, which meets on Tuesday and Wednesday, is expected to defend its policy of letting inflation run hot, while stabilizing markets it sees the pick-up in prices as only temporary. Chairman Jerome Powell will host a press forum Wednesday afternoon to discuss the Federal Open Market Committee’s decision.

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