Wall Street Nears Fifth Straight Month of Gains as Stock Futures Hold Steady

U.S. stock futures remain largely unchanged on Monday, hinting at a fifth consecutive month of gains as investors show optimism towards strong corporate earnings. The S&P 500 futures dipped slightly by 1 point, while Dow Jones Industrial Average futures rose by 2 points, and Nasdaq 100 futures eased by 12 points. In the previous session, the Dow Jones Industrial Average climbed 177 points, the S&P 500 surged 45 points, and the Nasdaq Composite gained 267 points.

The remarkable resilience of U.S. stocks has been attributed to the cooling inflation and the potential avoidance of a severe economic downturn as the Federal Reserve approaches the end of monetary tightening. The S&P 500 has achieved a 15.4% gain over the past five months and a 19.3% increase year-to-date, fueling market confidence. Furthermore, the ongoing second-quarter earnings season has also contributed to the positive market sentiment, with approximately 80% of S&P 500 companies reporting positive earnings per share surprises and 64% revealing positive revenue surprises, according to FactSet data.

Some analysts, like Scott Chronert from Citi, are adjusting their year-end targets for the S&P 500, anticipating further growth. Chronert raised his year-end targets for both 2023 and 2024 to 4,600 and 5,000, respectively, citing a higher probability of a soft economic landing and expectations of stronger earnings growth in 2024. As the week begins, investors eagerly await economic updates, such as the Chicago business barometer for July and the Fed senior loan officer survey for the second quarter, which could further influence market dynamics.