Markets Climb as Dow Leads Gains and S&P Reaches Record Close
Markets Climb as Dow Leads Gains and S&P Reaches Record Close
By:JJ Kinahan
Crypto regs and earnings season take center stage; inflation data due next week
- The Dow is leading market gains, the S&P hit a record close, and earnings season kicks off cautiously.
- Crypto regulation efforts and digital asset stockpile plans are may affect bitcoin market dynamics.
- Upcoming earnings reports from Apple, Meta and Tesla will combine with inflation data to shape the market’s direction.
Stocks advanced yesterday, with the Dow Jones Industrial Average leading gains, climbing 0.9%. The S&P 500 followed, rising 0.5% to achieve a new record high close. The Russell 2000 added 0.4%, while the Nasdaq Composite edged up 0.2%.
Earnings season has begun, though the largest names are yet to report. Some notable companies, however, have already released their results. Texas Instruments (TXN) beat earnings expectations but issued a disappointing outlook, sending its shares down 4.5% in premarket trading. American Express (AXP) also surpassed earnings estimates and announced a 17% dividend increase to $0.82. Despite that, its shares fell by approximately 3.5% in premarket. Boeing (BA) offered an early look at its earnings, revealing an anticipated $4 billion loss, resulting in a share decline of just over 1%.
Trump administration policies
This week, much attention has been on the new administration in Washington and its emerging policies. One focus is cryptocurrency regulation. President Trump signed an executive order directing his administration to investigate creating a national digital asset stockpile. Bitcoin has traded within a $30,000 range since December, and market participants will be closely monitoring price reactions as details of this initiative emerge.
Meanwhile the administration is pressing Saudi Arabia to lower oil prices and advocating for reduced interest rates. The result of these efforts remains uncertain. However, the U.S. dollar has weakened slightly, and gold prices have risen. Elevated volatility in gold could present trading opportunities for options investors.
In international developments, the Bank of Japan raised its interest rates by a quarter point, reaching the highest level in 17 years. The move recalls the market turbulence in August, caused by the unwinding of the yen-carry trade as rates increased.
More data next week
Looking ahead, next week will bring both significant earnings reports and economic data. Key companies such as Apple, Meta and Tesla are scheduled to release results. On the economic front, the Federal Reserve Open Market Committee (FOMC) will meet Wednesday, with rates expected to remain unchanged. On Friday, the latest inflation data will be published via the personal consumption expenditures (PCE) report.
Today, attention will focus on bonds, gold and digital assets. Despite calls for lower rates, bond yields remain elevated. Gold prices have climbed 1% in premarket trading. Bitcoin and other digital assets, which trade continuously, are being monitored for potential breakout movements.
As always, investors should adhere to their long-term strategies and plans.
JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan
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