The Dow Jones Industrial Average and S&P 500 were hovering near records Monday, as investors await earnings this week from corporate heavyweights, including from Big Tech, and a Federal Reserve policy meeting.

The pipeline of earnings could set the tone, analysts said, but investors also will be focused on China and the U.S. as tensions rise between the world’s top two economies.

What are major indexes doing?

The Dow Jones Industrial Average
DJIA,
+0.24%

was up 73 points, or 0.2%, near 35,135, building on its closing record Friday of 35,061.55.

The S&P 500
SPX,
+0.24%

rose 9.14 points, or 0.2%, to 4,420, also topping its closing record on Friday of 4,411.79.

The Nasdaq Composite
COMP,
+0.03%

rose 4 points, or less than 0.1%, to trade at 14,841.

U.S. benchmarks bounced back sharply last week from a July 19 tumble to end Friday at records. The S&P 500 on Friday rose 2% to finish at its 40th record close of 2021, and the tech-heavy Nasdaq Composite rose 2.8%. The Dow also pushed to a record close Friday, finishing above the 35,000 milestone for the first time.

What’s driving the market?

The Dow and S&P 500 edged toward record closes Monday, shaking off a softer tone across global equity markets as investors waited to hear from the C-suites of Big Tech companies about their expectations for the rest of 2021.

“It’s all about earnings this week,” said John Carey, director for equity income at Amundi U.S., adding that investors will be glued to what company executives have to say about their expectations for the second half of this year.

“I think investors will also be especially attuned to anything management has to say about inflation, cost pressures and the margin outlook, as a result of potentially rising labor costs and other inputs,” he told MarketWatch.

Results are due this week from major tech companies including Alphabet Inc.
GOOG,
+1.33%

GOOGL,
+0.77%
,
Amazon.com Inc.
AMZN,
+1.18%
,
Apple Inc.
AAPL,
+0.29%
,
Facebook Inc.
FB,
+0.72%

and Microsoft Corp.
MSFT,
-0.21%
.

Earnings Preview: Apple, Microsoft, Google, Facebook, Amazon and Tesla headline the biggest week of earnings

“The earnings season is now in full throttle and thus far continues to surprise to the upside, as most companies are reporting better than expected top and bottom-line results,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in a note.

The U.S. earnings calendar also includes electric-vehicle maker Tesla Inc.
TSLA,
+2.21%
,
which reports after the close on Monday.

“Folks are non-committed to jumping in front of the big earnings we have on for this week,” said Robert Pavlik, a senior portfolio manager at Dakota Wealth Management. “Earnings are not the concern. It’s the market’s reaction to earnings.”

But Pavlik also expects investors to focus on the outcome of the Federal Reserve’s two-day policy meeting, particularly if the delta variant of the coronaviurs that causes COVID-19 begins to weigh down the central bank’s plans to eventually tighten its extremely accommodative monetary policies.

“If this trend continues with the COVID variant this fall and winter, the Fed may not be able to raise interest rates [in 2023] as much as they want to, unless the economy really picks up steam,” he told MarketWatch.

Don’t miss: Stagflation is ‘a legitimate risk’ that would be painful for U.S. markets

The Fed meets Tuesday and Wednesday. Policy makers are expected to discuss plans around eventually slowing the pace of the Fed’s monthly bond purchases. But investors expecting clear answers about the crucial questions of when the tapering will start and the pace of any pullback will likely be disappointed, economists said.

See: Fed to tiptoe toward tapering this week

In Washington, the Biden administration on Monday said it was confident that a bipartisan infrastructure deal still can be worked out, despite setbacks over the weekend.

Global stocks in Europe and the U.K. closed modestly lower, while the Hang Seng
HSI,
-4.13%

skidded over 4%, following a crackdown by China both on Tencent’s music licensing and the entire educational tutoring industry. Tencent Music Entertainment
TME,
-2.97%

shares were off about 2.6% after dropped as much as 14% in premarket action.

U.S. government data on Monday showed U.S. new home sales fell 6.6% in June to an annual rate of 676,000, the lowest since the first month of the COVID-19 pandemic in early 2020, as high prices and a limited selection appeared to frustrate would-be buyers.

Also read: Goldman Sachs trims U.S. growth outlook due to weaker service sector

Which companies are in focus?

Lucid Group Inc.
LCID,
+10.64%

stock was up more than 8% on Monday, its first day of trading on the Nasdaq after the company’s merger with a blank-check company was approved on a second try Friday.

Shares of Hasbro Inc.
HAS,
+12.24%

rose 12.2% after the toy maker reported a second-quarter adjusted profit that was more than double what was expected, with revenue lifted by strength in franchise brands and Wizards of the Coast and digital gaming.

Aon PLC
AON,
+8.21%

and Willis Towers Watson PLC
WLTW,
-8.98%

on Monday announced a mutual agreement to terminate their $30 billion merger deal and end litigation with the U.S. Justice Department. Aon shares rose 8.3%, while Willis Towers Watson was off 9.1%.

Popular meme stock AMC Entertainment Holdings Inc.
AMC,
+8.92%

rose 8.5%, on track to halt a three-day losing streak, while GameStop Corp.
GME,
+1.98%

edged up 2%.

Otis Worldwide Corp.
OTIS,
+0.61%

shares were 0.6% higher after the maker of elevators and escalators reported second-quarter profit and sales that rose above expectations, with particular strength in its new equipment business, while also raising its full-year outlook.

Lockheed Martin Corp.
LMT,
-3.34%

shares fell 3.2% after the aerospace and defense contractor reported a second-quarter profit that came up shy of expectations, amid performance issues in aeronautics, though revenue topped forecasts.

What are other markets doing?

Bitcoin BTCUSD jumped 14% to trade above $40,000 after Amazon ran an advertisement looking for an individual to lead the retailer’s cryptocurrencies effort. A separate report said Amazon was looking to start accepting bitcoin for payment by the end of the year.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.297%

was flat at 1.28%. Yields and bond prices move in opposite directions.

The ICE U.S. Dollar Index
DXY,
-0.33%
,
a measure of the currency against a basket of six major rivals, was off 0.4%.

Oil futures closed lower, with the U.S. benchmark
CL00,
+0.14%

down 0.2%, while gold futures
GC00,
-0.20%

closed down 0.1% at $1,799.20 an ounce, its first settlement below$1,800 in almost three weeks.

In European equities, the Stoxx Europe 600
SXXP,
-0.08%

closed 0.1% lower, while London’s FTSE 100
UKX,
-0.03%

ended virtually flat.

Steven Goldstein contributed reporting

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