Stocks Slip, Oil Up to Start Crowded Earnings Week

By Joe Mazzola

(Monday market open)

Three central bank meetings and five Magnificent Seven earnings reports await investors this week, along with earnings from around one-third of S&P 500 companies. Today's calendar is light, though, and major indexes took a breather from last week's sizzling rally, hesitant after anticipated peace talks failed to materialize and crude oil resumed its climb. News reports today said Iran offered the U.S. a deal to reopen the Strait of Hormuz but postpone nuclear talks.

The marathon round of central bank meetings starts tomorrow with the Bank of Japan (BoJ), followed quickly by the Federal Reserve on Wednesday and the European Central Bank (ECB) on Thursday. Though none are expected to raise or lower rates, the fast pace could drive market volatility and reverberate around the Treasury market. Yields inched up this morning and remain elevated after climbing last week across the curve, a possible drag on stocks.

The S&P 500 Index and Nasdaq Composite carved new record highs Friday and are up four straight weeks. "Earnings from chip stocks helped fuel investor demand," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR). "The chip rally has been historic, and it speaks to the strength of the AI buildout theme and the insatiable demand for compute." There's potential for a pullback in chips later this week if capital expenditures guidance from the Magnificent Seven doesn't meet expectations, Peterson said, adding the market could continue to climb even if the chip sector consolidates.

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