Wall Street teeters ahead of Big Tech’s earnings

US stock markets swayed on Monday as investors continued to digest first-quarter earnings from some of the world’s largest companies and looked ahead to looming updates from Microsoft and Google parent Alphabet, among others.

Wall Street’s benchmark S&P 500 closed 0.1 percent higher, while the high-tech Nasdaq Composite closed 0.3 percent lower.

The US equity team at Morgan Stanley notes that stocks have generally performed well in the current earnings season, putting them at risk if investors start to focus on the increasingly cautious view of CEOs.

“For our more tactically oriented clients, we believe this dynamic poses a near-term risk to share prices given our more pessimistic earnings outlook this year, especially as the liquidity picture becomes less favorable,” they wrote in a note to clients.

Shares of Coca-Cola fell 0.2 percent after the beverage group reported net revenue growth of 5 percent in the first quarter.

The latest earnings from Microsoft, Alphabet and Amazon this week are likely to be of interest to investors. Big Tech has held up well even as US interest rates continue to rise – a factor supporting the broader market. Microsoft is up 18 percent year-to-date, while Amazon has gained 29 percent. The S&P 500 has added just over 7 percent so far.

Bed Bath & Beyond fell 39 percent to 18 cents a share after the home goods group filed for Chapter 11 bankruptcy protection on Sunday.

US government debt rose on Monday, sending the yield on the two-year rate-sensitive Treasury note down 0.04 percentage point to 4.14 percent, and the yield on the benchmark 10-year note fell 0.06 percentage point to 3.51 percent.

BMO strategists note that volumes have been just over half of recent averages. Moves are likely to remain muted ahead of first-quarter GDP figures due on Thursday and closely watched inflation data on Friday.

The Federal Reserve meets next week to set interest rates. While the quarter-point rise is largely priced in, investors are looking further afield for the possibility of lower rates later in the year.

An index measuring the dollar’s strength against a basket of six major currencies fell 0.3 percent.

China-related bourses started the week in full swing, with Hong Kong’s Hang Seng down 0.6 percent and Technology’s Hang Seng down 0.2 percent, despite trading down 1.1 percent earlier in the session.

A report from Bloomberg last week suggested that US President Joe Biden was close to limiting the ability of US companies to invest in important parts of the Chinese economy — a move that would once again raise concerns about the impact of ongoing geopolitical tensions between the two countries.

China’s CSI 300 fell 1.2 percent, dragged down by basic materials, property and non-cyclical consumers.

The regional Stoxx 600 in Europe and the FTSE 100 index in London each fell less than 0.1 percent. The moves came as Credit Suisse announced that it had suffered 61.2 billion Swiss francs ($68.6 billion) of asset outflows in the first quarter. Shares of UBS, which agreed to take over Credit Suisse last month, rose 0.8 percent.