Stocks made modest moves Monday before a busy week that includes a key Fed meeting and Big Tech earnings. Amid today's bare economic calendar, corporate updates were in focus, with fast food giant McDonald's (MCD) disclosing a triple miss in its quarterly results.
In its second quarter, MCD reported earnings of $2.97 per share on revenue of $6.49 billion, below the $3.07 per share and $6.62 billion analysts expected. Same-store sales, meanwhile, fell 1% vs Street estimates calling for a 0.4% increase.
McDonald's CEO Chris Kempczinski said "value execution" was to blame as consumers pushed back on price hikes. "These price increases disrupted long-running value programs and led consumers to reconsider their buying habits," Kempczinski added. To combat this, the company said it is extending its $5 value meal offering.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Despite the miss, MCD jumped 3.7%, making it the best Dow Jones stock today.
On Semiconductor is the best S&P 500 stock after earnings
Over at the S&P 500, ON Semiconductor (ON) was the biggest gainer, rising 11.5% after its results. The intelligent sensing and power solutions provider reported higher-than-expected earnings of 96 cents per share on $1.74 billion in revenue.
ON also said it expects third-quarter earnings per share to arrive between 91 cents and $1.03 on revenue of $1.70 billion to $1.80 billion. This is in line with Wall Street's expectations for earnings of 92 cents per share on $1.73 billion in sales.
After the results, B. Riley lifted its price target for the semiconductor stock to a Street-high $106, representing implied upside of 35% to current levels. For comparison, the average price target of the 31 analysts following ON tracked by S&P Global Market Intelligence is $83.08.
Morgan Stanley names Tesla a "top pick"
Outside of the earnings calendar, Tesla (TSLA) jumped 5.6% after Morgan Stanley analyst Adam Jonas tapped the electric vehicle (EV) maker as a top pick among U.S. auto stocks. Jonas has a $310 price target on TSLA, which is more than 30% above today's close.
Magnificent 7 stocks will remain in focus throughout the week, with Microsoft (MSFT, +0.3%) and Apple (AAPL, +0.1%) among those reporting. The results of these reports from "a heavy package of mega-cap tech names, will be a crucial test for a market that is trying to find direction," says Quincy Krosby, chief global strategist for LPL Financial.
Fed meeting on tap
This week's Federal Open Market Committee (FOMC) meeting, which wraps up Wednesday afternoon with a policy statement and presser from Fed Chair Jerome Powell, will also be a key event that could spark stock volatility.
"We think it's highly unlikely the Fed will cut rates," says Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company. Instead, investors will shift focus to September and look for clues in the press conference "for any evidence of how the Fed is thinking about its next meeting."
While Schutte feels "a soft landing is certainly still a possibility," he also believes "the Fed is likely going to want to see more clear evidence that inflation is under control or that the labor market is dramatically weakening before it's willing to lower rates."
As for today's price action, the Nasdaq Composite rose 0.07% to 17,370, the S&P 500 added 0.08% to 5,463, and the Dow Jones Industrial Average slipped 0.1% to 40,539.
Related content
- Best AI Stocks to Buy: Smart Artificial Intelligence Investments
- States With Low and No Capital Gains Tax
- Paris Olympics: 5 Sports-Related Stocks Going for Gold
-
Stock Market Today: Stocks Slip Ahead of Big Earnings, Inflation WeekPerhaps uncertainty about tariffs, inflation, interest rates and economic growth can only be answered with earnings.
-
Ask the Editor — Tax Questions on "The One Big Beautiful Bill Act"Ask the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the new tax law.
-
Stock Market Today: Stocks Slip Ahead of Big Earnings, Inflation Week
Perhaps uncertainty about tariffs, inflation, interest rates and economic growth can only be answered with earnings.
-
I'm a Financial Planner: Here Are Some Long-Term Care Insurance Tips for Every AgeStrategies include adding riders to life insurance for younger individuals and considering hybrid or traditional long-term care policies for those in their mid-50s and 60s.
-
Engineering Reliable Retirement Income in 2025: An Expert GuideFor dependable income, consider using a bucket strategy and annuities in tandem to promote structure, flexibility and peace of mind.
-
Crazy Markets Shouldn't Derail Your Retirement if You Follow This Financial Pro's PlanBeing nervous about retiring in a volatile market is a red flag that you're relying too heavily on your investment portfolio, rather than a comprehensive plan.
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff NoiseMarkets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
-
Dividend Increases: 7 Stocks With Rising PayoutsWhile dividend growth has been slowing, certain stocks have raised their dividend payouts. These are some selections.
-
Key to Financial Peace of Mind: Think 'What's Next?' Rather Than 'What If?'Even if you've hit your magic number for retirement, it's hard to stop worrying about money. Giving it a clear purpose is one way to reduce financial anxiety.
-
Three Estate Planning Documents a Business Owner Can't Afford to SkipA business owner's estate plan should protect the company and its employees as well as the entrepreneur's heirs. These three documents are critical.
