The S&P 500 rose Monday as traders combed through the latest batch of corporate earnings results, searching for clues on the health of corporate America.
The S&P 500 rose 0.33% to finish at 4,151.32, while the Dow Jones Industrial Average gained 100.71 points, or 0.3%, to end at 33,987.18. The Nasdaq Composite added 0.28% to settle at 12,157.72.
"There is a tug of war between those who are feeling optimistic that the Fed will soon be ending the rate tightening program because of softness that we're seeing in the economy ... with those who believe the Fed will be forced to raise rates longer because the economy is not in a sense, surrendering," said Sam Stovall, chief investment strategist at CFRA Research.
Earnings season pressed on with results from State Street and Charles Schwab before the bell. Schwab shares, which have come under pressure amid fears that the brokerage firm may suffer a similar fate to Silicon Valley Bank, rose 3.9% on a profit beat despite a decline in deposits. State Street fell 9.2% after missing estimates on the top and bottom lines.
Wall Street is closely monitoring the health of financial names this earnings period after Silicon Valley Bank's collapse last month spurred a liquidity crisis and rocked the broader sector.
Elsewhere, the S&P's communication services sector slumped 1.3%, led to the downside by declines from tech giants Alphabet, Netflix and Meta Platforms. The Google parent company fell more than 2% as The New York Times reported that Samsung is weighing making Bing its default search engine.
Corporate earnings got off to a positive start last week as banking giants Wells Fargo and JPMorgan Chase beat expectations. The findings seemed to suggest that these behemoths are holding up against mounting recession fears.
As companies grapple with sticky inflation and higher rates, many investors have braced for a downbeat earnings season, but data from Bank of America suggests that companies so far are hanging on. Of the names that reported during week one, 90% topped EPS estimates. That's the best beat rate to start earnings season since at least 2012, the bank said.
Despite signs of strength, Stovall cautions drawing overall conclusions as Wall Street awaits reports from areas expected to see double-digit year-over-year declines, including health care and communication services.
"'It's sort of a wait and see because what the banks giveth, the rest of the market might taketh away," he said.
The reporting period for financial companies presses on this week with results from Bank of America, Goldman Sachs and Morgan Stanley. Outside of financials, reports from electric vehicle heavyweight Tesla, IBM and Netflix are also due out.
