US stocks ended January on a positive note, with all major indexes registering an upside.
The S&P 500 climbed to 4,515.53, gaining by 1.89% while the Dow Jones Industrial Average closed over 400 points higher at 35,131.86 with 1.17% in gains. The tech-heavy Nasdaq Composite saw the most upside, notching 3.41% in gains to close at 14,239.88.
While the indexes remain significantly off their recent peaks, investors might be glad to see the end of January, a month that has marked the stock market’s worst performance since March 2020.
January saw stocks battered amid investor fears over rate hikes, which the Fed is looking at for March. The concerns about the pace of the tightening after US consumer price inflation hit highs of 7% for a four-decade peak also ate into market optimism and sent equities lower.
On Monday, Morgan Stanley analysts said that it would be difficult for the S&P 500 index to repeat last year’s returns given the outlook suggested by the US manufacturing data.
According to the analysts, monthly manufacturing orders show weaknesses, with a correlation between the data and stock market direction over the past 20 years. Analysts also expect volatility to remain high, with potential limitations to just how aggressive investors might want to buy the dip.
Robinhood, Spotify and Sony shares rally
The earnings season picks up a gear this week, with tech giants Alphabet, Meta Platforms, and Amazon all reporting. While the markets might focus on these companies, there are other big moves happening in the market.
Robinhood shares jumped 11% on Monday, continuing the upsurge seen since Friday when it was revealed Cathie Wood's Ark Invest had offloaded a key stock and bought over $30 million worth of the trading app’s stock.
Robinhood’s stock tanked after its disappointing earnings, but the slump appears to have provided a “buy the dip” opportunity for Ark Invest. Robinhood shares are up nearly 10% over the past five days, though they remain more than 23% down YTD.
Spotify jumped 13.5% on Monday to see a spectacular rebound after Friday’s downturn. The streaming platform’s stock had come under pressure after the host of “The Joe Rogan Experience” was criticized over Covid-19 related content.
The influential podcaster apologised and Spotify said it would take measures to avoid such a scenario from cropping up again.
Netflix and Tesla shares also jumped Monday, with Netflix gaining more than 11% and Tesla rising 10.7%. Sony shares gained 65 on Monday following the company’s acquisition of video platform Bungie for $3.6 billion.
In other markets
The 10-year US Treasury yield is up by 5 basis points 1.787% after sliding to 1.782% on Monday. The benchmark yield was at 1.779% on Friday.
Oil prices continue to hover near $89 following a slight dip from seven-year highs reached last week. The week will see the OPEC+ nations hold another meeting on production, although geopolitical tensions in the Crimea region could be a negative factor.
Gold is 0.4% to $1,803 per ounce, bouncing from intraday lows near $1,798 per ounce.
Bitcoin is up 3.5% to $38,550 as it continues its slow climb towards major resistance levels around $40,000.