U.S. indices rise as tech earnings take centre stage

US equity indices entered the new month with renewed momentum, as Wall Street shook off volatility in commodities, crypto, and artificial intelligence stocks. Reports showed the Dow Jones Industrial Average climbed more than 500 points on Monday, while the S&P 500 rose roughly 0.5%, finishing just shy of a fresh closing record. The Nasdaq Composite also advanced, signalling resilience despite renewed pressure on heavyweight tech names.

With more than 100 S&P 500 companies due to report earnings this week, markets are shifting focus from macro headlines to corporate fundamentals. As investors look for confirmation that growth expectations remain intact, many perceive index direction now hinges on whether earnings can justify the rally and support further upside.

What’s driving US Indices?

The early-month strength in US indices reflects a combination of improving economic signals and broad-based earnings optimism. Manufacturing data released Monday showed activity expanding for the first time in nearly a year, with both the Institute for Supply Management and S&P Global reporting stronger-than-expected production readings for January. 

Those figures helped offset uncertainty around monetary policy following President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair.

Earnings dynamics have also shifted in favour of index stability. Gains were not confined to mega-cap technology, but spread across industrials, consumer stocks, and semiconductors. Sandisk surged 15% to lead the S&P 500, while Caterpillar and Walmart powered the Dow higher. Increased sector participation has coincided with a period where indices appeared less affected by volatility in individual technology stocks.

Why it matters

For investors, the ability of indices to rise amid mixed tech performance is a notable signal. Nvidia shares fell nearly 3% after reports suggested OpenAI was reconsidering a planned $100bn investment, citing dissatisfaction with existing chip infrastructure. Yet the Nasdaq continued to advance, indicating that AI-related uncertainty is becoming more company-specific rather than systemic.

According to analysts at Morgan Stanley, markets are now “moving from narrative-driven enthusiasm toward earnings validation.” That transition matters for index outlooks. When benchmarks hold firm despite negative headlines, it often reflects confidence in aggregate earnings growth rather than speculative positioning.

Impact on markets and investors

The divergence between equities and other asset classes has become increasingly pronounced. While US indices rallied, precious metals extended their sharp pullback. Gold traded below $4,700 an ounce after reaching above $5,600 last week, while silver remained volatile following a record single-day decline. Bitcoin also steadied near $78,000 after briefly falling to its lowest level since April.

For index-focused investors, this divergence reinforces the appeal of equities as capital rotates out of overcrowded trades. Despite the US dollar firming and 10-year Treasury yields rising toward 4.3%, equity valuations have remained supported. 

That resilience suggests markets are prioritising earnings visibility over near-term rate or currency pressures.

Expert outlook

Attention now turns squarely to Big Tech earnings. Results from Amazon, Alphabet, and Advanced Micro Devices are expected to set the tone for whether index gains can extend beyond the early-month bounce. Palantir’s stronger-than-expected guidance has already boosted sentiment, while Microsoft’s more muted reception last week raised the bar for peers.

Risks remain. The delay of Friday’s US jobs report due to a partial government shutdown removes a key input for interest-rate expectations. The absence of labor market data may contribute to increased volatility, as indices react to individual earnings surprises without a clear macroeconomic backdrop. The path forward is less about momentum and more about confirmation.

Key takeaway

The initial trading sessions of the month showed gains; however, market direction remains sensitive to upcoming economic data and earnings surprises. Crucially, gains are no longer dependent on a single tech narrative, potentially diversifying the drivers of recent index movements. Commodity and crypto volatility reflect rotation rather than risk aversion. With Big Tech earnings and labour data still ahead, the coming sessions will determine whether indices can convert stability into sustained upside.