- US stocks closed higher on the last trading day of January, wrapping up one of the worst months since the pandemic began.
- The whiplash in equities began with jitters that the Fed will make an aggressive pivot to fight inflation
- Mega-cap tech firms including Alphabet, Facebook, and Amazon are all set to report this week.
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US stocks closed the last trading day of January in the green as investors braced for more fourth-quarter earnings results amid a more hawkish Federal Reserve.
January marked one of the worst months for equities since the pandemic began as investors grappled with a more aggressive central bank determined to tighten monetary policy in order to tamp down surging inflation.
The benchmark S&P 500 and the Dow Jones Industrial Average closed higher on Monday. Meanwhile, the tech-heavy Nasdaq Composite spiked over 3%.
Here's where US indexes stood shortly after 4:00 p.m. ET close on Monday:
- S&P 500: 4,515.53, up 1.89%
- Dow Jones Industrial Average: 35,131.86, up 1.17% (406.39 points)
- Nasdaq Composite: 14,239.88, up 3.41%
The whiplash in US equities began with jitters that a Fed determined to curb inflation will turn aggressively hawkish. That included worries the central bank may hike rates and start to shrink its nearly $9 trillion balance sheet faster than expected this year.
"It seems the Fed will struggle to reach a clear consensus over how aggressive the March liftoff will be, so aggressive 'buying the dip' won't be happening anytime soon," Edward Moya, senior equity analyst at Oanda, said in a Monday note. "Economic conditions are still looking good this year but repositioning overvaluations and growth concerns will likely keep volatility elevated over the short-term."
Meanwhile, earnings season continues with mega-cap tech firms Alphabet, Meta Platforms' Facebook, and Amazon set to report this week.
"A reminder of the real strength in well-established companies should give strength and confidence to investors to stay the course and look for bargains," Louis Navellier, chair and founder of fund manager Navellier & Associates, said in a Monday note.
Sony jumped nearly 6% in Monday's session after the company announced it is acquiring Bungie — the developer behind Destiny and Halo franchises — for $3.6 billion as video game mergers and acquisitions heat up.
Spotify surged 11% as the audio streaming company said it will add an advisory to content containing discussions about COVID-19, a response to criticism that "The Joe Rogan Experience" program was spreading misinformation about the virus.
Robinhood popped 11% as Cathie Wood's Ark Invest revealed it bought the dip following lackluster earnings from the popular trading app last week.
The 10-year Treasury yield fell to 1.782% from Friday's 1.779%. Bond yields move inversely to prices.
Oil prices hovered near seven-year highs as tensions over Russia and Ukraine are still drawing the market's attention ahead of this week's OPEC+ meeting to discuss a March production increase.
West Texas Intermediate crude oil rose as much as 1.70% to $88.30 per barrel. Brent crude, oil's international benchmark, jumped as much as 1.31% to $91.21 per barrel, and is headed for its best January in at least 30 years.
Gold rose 0.48% to $1,798.02 per ounce.