US shares Rally on earnings, interest rate expectations

US shares rallied for a second straight session while investors focus on some of the world’s biggest companies to report earnings this week. Traders also spiced their expectations and bets on whether the US central bank could slow its pace of interest-rate hiking after digesting negative economic data released on Monday.

Almost 80% of the S&P 500 index stocks closed in green territory on Monday on gains in technology and health-care sector companies. The Nasdaq 100 also rose more than 1%. US-listed Chinese shares plunged after that Chinese equity index fell as President Xi Jinping solidified his power. Among the megacap companies to report earnings this week are Alphabet, Microsoft Corp. and Meta Platforms.

US Treasury 10-year yields ended the session around 4.25%. UK bonds posted some of their biggest gains on record as investors expect incoming Prime Minister Rishi Sunak to repair the damage caused by predecessor Liz Truss after her massive package of unfunded tax cuts roiled financial markets.

Earnings are in focus in the US, with investors still on edge over whether companies that are among the key profit-growth engines for the S&P 500 can deliver profits with inflation crimping margins. Of the almost 20% of companies that have reported so far, roughly 58% posted positive surprises in both revenue and earnings per share.