(Bloomberg) -- A rally in chipmakers drove stocks to all-time highs, while US-Russia talks raised hopes of an end to the war in Ukraine.
The S&P 500 topped its January record.
Equities have been stuck in a narrow range amid uncertainities including tariffs, inflation and the geopolitical scenario.
To Matt Maley at Miller Tabak + Co., only a meaningful break of the S&P 500 above its record would be a compelling development.
“The high in January was only a very mild move above the record high set in December, and it fell right back into its sideways range very quickly.”
The S&P 500 rose 0.2%. The Nasdaq 100 added 0.2%. The Dow Jones Industrial Average wavered. A closely watched gauge of chipmakers gained 1.7%.
Intel Corp. jumped amid breakup speculation. Super Micro Computer Inc. soared on a bullish outlook. Meta Platforms Inc. halted a 20-day rally.
The yield on 10-year Treasuries rose seven basis points to 4.55%. A dollar gauge added 0.2%. Bitcoin sank 2.3%.
“While we expect volatility to pick up in the near term amid a range of macro uncertainties, favorable fundamentals should continue to support global equities’ next leg up,” said Solita Marcelli at UBS Global Wealth Management.
At Piper Sandler, Craig Johnson says the market’s resilience has been impressive year-to-date as investors refuse to “back down.”
“We expect market conditions to remain choppy as investors rotate ‘down-cap’ amid declining Treasury yields, weakening crude oil, and a pullback in the US dollar.”
Global stocks have become the most-popular asset class with investors, who are showing the biggest willingness to take risk in 15 years, according to a survey by Bank of America Corp.
Fund managers’ cash levels fell to the lowest since 2010, while 34% of participants said they expect world equities to be the best-performing asset in 2025, the survey showed. A net 11% indicated they were underweight bonds.
Investors are “long stocks, short everything else,” strategist Michael Hartnett wrote in a note. About 89% of respondents said US equities were overvalued, the most since at least April 2001.
“Investors will want to see more ‘Goldilocks’ data to contradict last week’s ‘whiff of stagflation,’ and a less hawkish tone from Fed officials,” said Tom Essaye at The Sevens Report.
“Additionally, stabilizing yields and solid earnings would offer added tailwinds for equity markets at the start of the holiday-shortened trading week,” he noted.
Now beneath a solid fourth-quarter earnings season, there’s actually a worrisome development that may put a dent in the bull case for US stocks: Corporate America’s profit outlook is souring.
A gauge of forward earnings that compares companies’ forecasts with analysts’ projections is the lowest in a year after plunging to a level last seen in 2016 earlier this month, data compiled by Bloomberg Intelligence show.
With the vast majority of S&P 500 companies having reported so far this results cycle, earnings per share is up 13% on the year, highest since fourth quarter of 2021, BofA strategists including Ohsung Kwon and Savita Subramanian said.
Yet guidance from companies has been weak even as BofA’s Corporate Sentiment Score — a measure of positive versus negative words on earnings calls — rose to a record.
Corporate Highlights:
Key events this week:
Some of the main moves in markets:
Stocks
Currencies
Cryptocurrencies
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Sujata Rao, Margaryta Kirakosian, Aya Wagatsuma and Rob Verdonck.
