Stock Market Today: Dow Makes Strong Start to Week as Banks, Tech Shine
2022.05.24 00:42
By Yasin Ebrahim
Investing.com — The Dow climbed Monday, buoyed by a JPMorgan-led jump in banks and rally in big tech as the dip-buying seen late-Friday continued into the start of the week.
The Dow Jones Industrial Average gained 2%, or 615 points, the Nasdaq was up 1.56%, and the S&P 500 rose 1.9%
JPMorgan Chase (NYSE:JPM) racked up more than 6% after the bank lifted its guidance on annual performance, forecasting net interest income to exceed $56 billion in 2022, above the prior forecast in January of $50 billion.
Banking stocks have been under pressure recently as fears about a recession offset expectations for higher interest rates as the Federal Reserve is set to step up the pace of monetary policy tightening.
But JPMorgan, while acknowledging that the risk of a “future adverse outcome” has increased, downplayed the risk of recession, pointing to a U.S. economy that “remains fundamentally strong.”
The positive outlook from JPMorgan sparked a rally in several banks including Citigroup (NYSE:C), Wells Fargo & Company (NYSE:WFC) and Bank of America (NYSE:BAC).
Energy stocks, meanwhile, rose more than 2% as oil prices wavered between gains and losses despite growing expectations for a boost in energy demand as Shanghai prepares to reopen after a two-month Covid-19 lockdown.
Schlumberger NV (NYSE:SLB), APA (NASDAQ:APA), and Coterra Energy (NYSE:CTRA) were up sharply on the day, with the latter rising by more than 5%.
Technology, which has led the recent market rout, continued to build on momentum seen late Friday, with Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) leading the gains.
Airbnb was marginally higher, shrugging off a CNBC report, citing unnamed sources, that the company is set to shut down its domestic business in China by this summer.
In deal news, VMware (NYSE:VMW) soared more than 24% on reports that the software company is in talks advanced talks to be acquired by chipmaker Broadcom (NASDAQ:AVGO) for about $140 a share.
If the deal does go through, it could, however, attract regulatory scrutiny despite a lack of business overlap between the firms.
“Our one concern is the potential that regulators block the deal. While we don’t see the business overlap that traditionally has created regulatory scrutiny, we would argue such overlap didn’t exist with AVGO’s proposed QCOM acquisition, nor QCOM’s aborted efforts to buy NXP [Semiconductors],” Wedbush said.
