By Yasin Ebrahim
The Dow made a positive start to the week Monday, as a rally in energy offset weakness in tech ahead of quarterly earnings from big tech and a Federal Reserve meeting set to kick off later this week.
Energy rose more than 3%, supported by a jump in oil prices amid a weaker dollar and ongoing concerns about supply fears.
Natural gas prices, meanwhile, jumped sharply after Russia’s Gazprom said it would cut Europe’s gas flow via Nord Stream to 20% because of maintenance issues.
Financials, meanwhile, also played a role in the broader market climb, powered by a rally in regional banks as Treasury yields inched higher.
SVB Financial Group (NASDAQ:SIVB) climbed more than 8% after Evercore upgraded its rating on the stock to outperform from in-line, citing an attractive entry point.
Tech kept gains in the broader market in check ahead of quarterly results from big tech. Microsoft Corporation (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are set to report earnings on Tuesday, with reports from Meta (NASDAQ:META), Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) due later this week.
The rally in tech since mid-June has coincided with a slip in Treasury yields — making it more attractive to own higher-valued growth sectors of the market — as investors price in a less hawkish Federal Reserve on signs that inflation is moderating as economic growth softens.
“The tightening in financial conditions to date is already large enough and the growth trajectory is already low enough that speeding up would be unnecessarily risky,” Goldman Sachs said in a recent note, forecasting the Fed to hike rates by 0.75% on Wednesday.
Consumer discretionary stocks were also a drag on the broader market, paced by weakness in retailers and homebuilders.