US Stocks Set to End Losing Streak as Tensions Ease, Earnings Season Approaches

Amidst geopolitical stability and upbeat Corporate earnings outlooks, US equities are poised to break a six-day losing streak, with the S&P 500, Nasdaq 100, and Dow all showing modest gains at midday. Gold prices have plunged by 2.5% due to reduced tensions in the Middle East, marking its steepest single-day decline since June 2022. However, Bitcoin has reclaimed the $66,000 level, supported by the overall positive risk sentiment.

U.S. Stocks Poised to End Historic Losing Streak as Geopolitical Tensions Ease and Earnings Season Looms

In a dramatic reversal of fortune, U.S. stocks are poised to break a six-day losing streak that has plagued the markets for nearly two years. The turnaround reflects an easing of geopolitical tensions in the Middle East, coupled with a surge in investor confidence ahead of a crucial earnings season.

Indices Aim for Modest Gains as Investors Brace for Earnings Reports

As of noon trading in New York on Monday, all major indices were trading higher, indicating modest gains. The Dow Jones Industrial Average rose 0.8%, the S&P 500 gained 0.9%, and the Nasdaq 100 climbed 0.9%. This positive sentiment was driven by expectations of strong corporate earnings, with pivotal reports scheduled from Visa, Tesla, Meta Platforms, Microsoft, and Alphabet.

Geopolitical Tensions Subside, Impacting Commodity Prices

The easing of geopolitical tensions in the Middle East, particularly the de-escalation of hostilities between Iran and Saudi Arabia, has bolstered market sentiment. However, this has also exerted downward pressure on key global commodities. Gold plunged 2.5% to $2,330 per ounce, marking its most significant single-day decline since June 2022, while silver tumbled 5%.

Oil Prices Steady Amidst Easing Tensions

Oil prices remained broadly steady, erasing early session losses. The West Texas Intermediate (WTI) light crude traded at $82 a barrel, with investors weighing the impact of easing geopolitical tensions against concerns over potential supply disruptions. Treasury yields saw no movements amidst a lack of rate-sensitive data.

Bitcoin Rallies Above $66,000 on Positive Risk Sentiment

Positive risk sentiment aided Bitcoin, with the largest cryptocurrency rising above $66,000. This surge was likely driven by the easing of geopolitical tensions and the anticipation of a strong earnings season. Bitcoin is on track for its highest close in more than a week.

Major U.S. Indices Experience Gains, ETFs Follow Suit

The SPDR S&P 500 ETF Trust (NYSE:SPY) rose 1% to $500.03, the SPDR Dow Jones Industrial Average (NYSE:DIA) rose 0.8%% to $383.02, and the tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) rallied 1% to $417.03. Small caps, as tracked by the iShares Russell 2000 ETF (NYSE:IWM), soared 1.2%.

Sector-Wise Performance Highlights

The Financials Select Sector SPDR Fund (NYSE:XLF) outperformed, up 1.4%, followed by the Industrials Select Sector SPDR Fund (NYSE:XLI), up 1%. The Materials Select Sector SPDR Fund (NYSE:XLB) was the major laggard, up 0.2%.

Notable Stock Movers

• Ford Motor Co. (NYSE:F) rose over 5%, driven by heightened anticipation surrounding its forthcoming quarterly results.
• Wolfspeed Inc. (NYSE:WOLF) surged nearly 10% following reports of activist investor interest and potential avenues for shareholder value enhancement.
• Informatica Inc. (NYSE:INFA) saw a decrease of over 8% after quashing rumors of acquisition discussions.
• Coinbase Global Inc. (NASDAQ:COIN) rose over 5% amidst the broader cryptocurrency market rebound.
• Cardinal Health Inc. (NYSE:CAH) experienced a 5% decline following the announcement of a non-renewal of its pharmaceutical distribution contracts with OptumRx.
• Newmont Corporation (NYSE:NEM) tumbled over 3% as gold prices fell.

Analysts' Views

According to Benzinga Pro analysts, the positive market sentiment is driven by a combination of easing geopolitical tensions, expectations of strong earnings, and the ongoing cryptocurrency rally. Analysts believe that while the market may experience some volatility, the underlying fundamentals remain positive, supporting further gains in the near term.