U.S. Stocks Rise Ahead of Third-Quarter Earnings Season

U.S. stocks traded higher on Monday as investors prepared for the third-quarter earnings season. The market gains followed a quiet weekend and the release of the ISM Services index, which read 54.9. While this figure largely matched consensus expectations, the report noted declines in new orders and business activity, while the prices paid component reached its highest level since 2022 due to tariffs and energy prices.

Goldman Sachs analysts suggest the S&P 500 may outperform consensus estimates, which forecast earnings per share growth of 27% for the third quarter. This represents a slowdown from the 33% growth recorded in the second quarter, and analysts believe growth is unlikely to exceed that previous pace.

The earnings season officially begins Thursday with a report from PepsiCo, Inc. Analysts have noted that slower U.S. growth could create headwinds for the company. Delta Air Lines is scheduled to report its results on Friday, with market observers highlighting rising jet fuel prices as a potential risk to its performance.