Nasdaq 100: Apple and Alphabet Stocks Rise as Oil Prices Drop, Earnings Loom

Stocks Gain as Oil Prices Drop, Tech Earnings and Economic Data in Focus

Stocks rose Monday as investors geared up for a highly anticipated week of earnings from tech giants, aiming to propel the Nasdaq Composite higher. A sharp drop in oil prices, triggered by Israel’s non-disruptive strikes on Iran, further supported equities. With key tech earnings and economic reports expected, markets face a week poised for potential shifts in direction.

At 15:56 GMT, the Dow Jones Industrial Average is trading 42361.41, up 247.01 or +0.59%. The S&P 500 Index is at 5827.57, up 19.45 or +0.33% and the Nasdaq 100 Index is trading 18601.43, up 82.82 or +0.45%.

Tech, Consumer, and Crypto Sectors Drive Initial Gains

Ahead of earnings releases, tech stocks showed strength, with shares of Alphabet and Apple gaining 1% and 0.6%, respectively, as investors watch for these companies’ latest quarterly reports.

Five of the “Magnificent Seven” — Alphabet, Microsoft, Meta Platforms, Amazon, and Apple — are set to release results, carrying potential to impact overall market sentiment.

Horizon Investments’ Mike Dickson noted that “there’s going to be a laser focus on whether they can continue hitting those growth targets,” given their high valuations and central role in supporting Nasdaq’s gains. Any earnings disappointments could spark volatility, particularly in a high-rate environment.

In the consumer sector, McDonald’s shares climbed 1.44% after announcing the return of its Quarter Pounder burger to 900 locations following an E. coli-related pause. This return comes just ahead of the company’s earnings report on Tuesday, with investors likely focusing on the brand’s resilience amid recent setbacks.

Crypto-related stocks also saw gains as Bitcoin approached the $70,000 threshold. Shares of Coinbase rose 4%, while MicroStrategy gained over 5%, both companies benefiting from Bitcoin’s recent rally. Both are slated to report earnings this week, which could offer insights into the crypto sector’s sustained momentum.

Oil Prices Drop on Eased Geopolitical Concerns

Oil prices plunged over 6% as geopolitical tensions eased slightly. Israeli airstrikes over the weekend targeted military installations in Iran but avoided energy infrastructure, easing concerns of immediate disruptions. West Texas Intermediate (WTI) futures fell 6.26% to $67.29 per barrel, the largest single-day loss in more than two years. With Israel choosing not to target crude facilities, Citi revised its three-month Brent forecast to $70 per barrel, citing an oversupplied market. Andy Lipow, president of Lipow Oil Associates, stated, “The oil market is back to an oversupplied scenario, and it’s unlikely Brent will reach $80 in the near term,” amid rising production from the U.S., Canada, and other nations.

Key Economic Data to Set Fed Expectations

Several high-stakes economic reports are due this week, set to provide further clues on the Federal Reserve’s policy direction ahead of its November 7 meeting. Investors will monitor Wednesday’s preliminary third-quarter GDP reading, followed by the PCE price index on Thursday, and Friday’s September jobs report. Stronger-than-expected growth or persistent inflation could solidify concerns over elevated rates, potentially tempering risk appetite in equities. The data could thus set the tone for how markets react to any hawkish signals from the Fed in the weeks to come.

Market Forecast

This week’s outcomes in tech earnings and economic reports will be key in shaping near-term market direction. Tech stocks are positioned for further gains if earnings meet expectations, though any significant misses could lead to pullbacks. Oil prices, meanwhile, are likely to remain under pressure amid oversupply, with limited upside potential barring renewed geopolitical tension. Overall, the outlook for equities leans bullish, with momentum contingent on tech earnings and economic stability metrics.