The Dow Jones Industrial Average rose Monday, notching its longest winning streak since February 2017, to kick off a busy week of key earnings reports and a major policy decision from the Federal Reserve.
Energy stocks led gains in the S&P 500, with the sector up about 1.7% after oil and gasoline futures touched a three-month high Monday. Chevron rose nearly 2% after the oil giant reported preliminary second-quarter adjusted earnings Sunday that topped analysts' estimates.
Stocks continued to grind higher even after a 10-day advance for the Dow Jones Industrial Average. The blue-chip Dow eked out a 2.51-point gain on Friday, marking its longest rally since August 2017. For the week, the S&P 500 added 0.7%, while the Nasdaq Composite fell 0.6%.
"So far, there's no evidence of a recession. So as long as there's no evidence of recession, and I think the market will probably continue to melt up; people are chasing," Steve Eisman, senior portfolio manager at Neuberger Berman, said on CNBC's "Squawk Box."
Still, some market participants expect a major week for earnings, as well as the Federal Reserve's last policy meeting until September, could test the recent rally. The Fed is widely anticipated to raise rates by a quarter percentage point at the conclusion of its meeting on Wednesday. Traders will be listening to comments by Chair Jerome Powell to get a sense of the central bank's position on what happens next as it tries to navigate a soft landing for the economy.
Wall Street is anticipating earnings results from some 150 S&P 500 companies this week, or about 30% of the broader index. Big tech earnings are on deck from Alphabet, Microsoft and Meta. It's a major week for industrial companies and big oil as well.
Traders will also watch for the personal consumption expenditures index, the Fed's preferred inflation gauge, which is due at the end of the week.
— CNBC's Robert Hum and Yun Li contributed reporting.
Dow Industrials score an 11-day rally less than once a decade, Bespoke says
The Dow Jones Industrial Average extended its latest rally to an 11th straight day on Monday, only the sixth time since 1945 that the benchmark has advanced for 11 or more consecutive days, according to a tweet from a Bespoke Investment Group, led by co-founder Paul Hickey.
Bespoke noted that, based on the numbers and the fact that World War II ended 78 years ago, an 11-day surge in the Dow occurs on average less than once every decade.
— Scott Schnipper
Stocks close higher Monday
Small cap stocks might be next in line for outperformance, Canaccord Genuity says
The Dow's recent hot streak is helping to broaden out the market rally, and the small cap Russell 2000 could be due for its own bounce, according to Canaccord Genuity.
Strategist Tony Dwyer said in a note to clients that the Russell 2000 is appears to be bottoming out relative to the S&P 500 and could soon start to gain ground.
"It is good to see the improvement in the broad market since early June, and given the historic market weighting of the top 10 SPX stocks ... and bottoming in the relative charts, we would favor the Russell 2000 over the S&P 500 ... for the foreseeable future," Dwyer wrote.
— Jesse Pound
Dow is higher by 200 points in the final hour of trading
Chart analyst Katie Stockton says she's at a 'medium-level hold' for tech names
With large-cap technology names trading at high forward price-to-earnings ratio, Katie Stockton, founder and managing partner of Fairlead Strategies, says the buy story has become slightly less compelling for these shares.
"There are very redeeming qualities, and yet short term momentum has certainly fallen off a little bit. And that's something that we have an eye on from a technical perspective," Stockton told CNBC's "The Exchange" on Monday.
"It's not at the point where we're seeing decisive sell signals, but we're at the point where we are shying away from adding new exposure at current levels. So we're kind of at a medium-level hold here; not a weak hold [nor] a strong pull for that level," Stockton said.
She added that she is also holding back on adding exposure to the Invesco QQQ Trust Series fund.
"With that in mind, we usually like to see a reward to risk of better than two-to-one, [which] we don't have at this time. And that goes for not only QQQ, but areas like the semiconductor sector," said Stockton.
— Hakyung Kim
This meme stock ETF is soaring in 2023
As investors become more confident in the market rally, retail traders are starting to jump back into the types of stocks that were popular during the meme stock craze of 2021.
One way to track the meme trade — the Roundhill Meme ETF (MEME) — is up nearly 60% year to date.
Some of the holdings in that ETF are also well-liked by Wall Street analysts. Read more about those stocks on CNBC Pro.
Piper Sandler downgrades American Express, cites slowing growth
Shares of American Express declined 1.2% after Piper Sandler downgraded shares to underweight from a neutral rating, citing slowing growth concerns and margin headwinds that should weigh on 2024 earnings.
"We have become increasingly concerned AXP will have difficulty hitting its targeted 10%+ revenue growth and ~15% EPS growth with network volume experiencing a sizable slowdown," wrote analyst Kevin Barker. "In addition, our recent work on the re-start of federal student debt payments (note here) indicates the 25-34 years old age cohort will be the most impacted and likely will see slower spending combined higher default rates."
Given this outlook, Barker trimmed the firm's price target to $149 from $172 a share, reflecting more than 12% downside from Fri