U.S. stocks rose on Monday with the major tech names outperforming as investors braced for a big week of corporate earnings and lawmakers continued coronavirus stimulus negotiations.
Apple climbed 2.3%. Amazon advanced 1.5% after several analysts raised their price targets on the e-commerce giant. Other tech-related stocks, including Facebook, Netflix and Alphabet, also traded higher.
Market sentiment was also boosted after the U.S. government allocated an additional $472 million towards Moderna's coronavirus vaccine research. The stock jumped 9.2%.
The move higher in stocks came as gold prices soared to a new record high. Gold futures hit an intraday high of $1,941.90 per ounce and settled 1.8% higher at $1,931.50. Monday's gain put the precious metal up more than 26% year to date, on pace for its biggest one-year gain since 2010.
"Gold is probably giving us a warning ... but the market continues to chug along higher," said JJ Kinahan, chief market strategist at TD Ameritrade. Kinahan added gold's surge to a record high would be more concerning if the 10-year Treasury yield was declining and the Cboe Volatility Index (VIX) was rising. "Until I see the other two indicators support what's going on in gold, I don't need to call the top."
The VIX — widely considered to be the best gauge of fear in the market — dipped to trade below 25. The benchmark 10-year rate was unchanged at 0.59%.
This week will be one of the busiest of the corporate earnings season. McDonald's, Pfizer, Alphabet, Apple and AMD are among the companies slated to release their latest quarterly figures this week.
Through Monday morning, 130 S&P 500 companies had reported earnings, with 80% beating analyst expectations, according to Refinitiv. However, overall S&P 500 earnings have fallen 40% from the year-earlier period as the coronavirus pandemic takes a big bite out of corporate profits.
"Stock prices have soared even as analysts' consensus expected earnings estimates have plunged," said Ed Yardeni, chief investment strategist at Yardeni Research. "These estimates have started to show signs of bottoming in the past few weeks. However, any recovery could be dampened or even aborted if the Covid-19 case count continues to mount and state governors slow or reverse the lifting of lockdown restrictions."
Traders also turned their eyes to Washington as lawmakers tried to push forward on another coronavirus stimulus package.
On Sunday, Treasury Secretary Steven Mnuchin said Republicans had finalized a bill for about $1 trillion in coronavirus relief funds. Mnuchin added he hopes the proposal can find bipartisan support.
However, Jefferies Chief Economist Aneta Markowska warned there "is still a wide gap between the GOP and Democrats, especially on unemployment benefits and state and local gov't aid. Closing the gap will probably take more than a week, which means that an agreement is unlikely to be reached before July 31."
White House economic advisor Larry Kudlow shed some light on some of the measures included in the GOP proposal, noting: "There's a $1,200 check coming, that's going to be part of the new package."
Meanwhile, The Washington Post reported Senate Republicans are seeking to reduce weekly unemployment benefits to $200 from $600.
Wall Street was coming off a losing week as shares of major tech companies struggled and U.S.-China tensions rose. The Dow and S&P 500 each snapped a three-week winning streak. The Nasdaq, meanwhile, posted its first back-to-back weekly losses since May.
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