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
-
Will President Trump's Medicare Executive Order Raise Drug Prices?President Trump rescinded a Biden-era Executive Order that would have lowered the copays for some drugs to $2 for Medicare enrollees.
-
Stock Market Today: Dow Adds 538 Points on First Trading Day of Second Trump AdministrationStocks rise while the White House issues a historic series of executive orders.
-
Stock Market Today: Dow Adds 538 Points on First Trading Day of Second Trump Administration
Stocks rise while the White House issues a historic series of executive orders.
-
Nvidia Stock Up After President Trump Revokes Biden AI OrderNvidia stock is higher Tuesday after President Trump revoked a 2023 executive order targeting AI developers. Here's what we know.
-
Apple Stock Slapped With Another Sell Rating: What to KnowThe latest Apple stock downgrade centers around iPhone sales and the weakening consumer electronics market. Here's what investors need to know.
-
Why 3M Is the Best Dow Jones Stock Today3M stock is soaring Tuesday after the industrial conglomerate beat expectations for its fourth quarter and provided a positive outlook. Here's what to know.
-
Getting Divorced? Beware of Hidden Tax Traps as You Divide AssetsDividing assets fairly in a divorce means looking beyond their current values and asking whether they'll create tax liabilities — or tax breaks — in the future.
-
All-You-Can-Eat Buffets: Can You Get Kicked Out for Eating Too Much?Don't plan on practicing your competitive-eating skills at an all-you-can-eat buffet. You can definitely get kicked out. Plus, don't be a jerk.
-
5 Tips for Investing in the Trump PresidencyWith Trump back in office, expectations are high the bull market will continue. Here's how investors can prepare.
-
A Social Security Storm Is Gathering: Here's Your Safety PlanIf Social Security reserves are depleted by 2033, as predicted, future benefits could be cut by as much as 21%. Here’s how to weather the impending storm.
