Stocks Edge Higher Ahead of Big Tech Earnings, Treasury Borrowing Update

Stocks edged higher Monday as investors braced for a critical week of corporate earnings and government debt updates, setting the stage for potentially increased volatility across markets.

The Dow Jones Industrial Average rose 114.09 points, or 0.28%, to close at 40,227.6, while the S&P 500 gained 3.54 points, or 0.06%, finishing at 5,528.75. The Nasdaq Composite slipped 16.81 points, or 0.10%, to 17,366.1, weighed down by weakness in select technology stocks. The Russell 2000, a proxy for smaller companies, outperformed with a 0.41% rise to 194.92.

Markets traded cautiously as investors awaited a series of key events later this week. The first-quarter gross domestic product report and the Federal Reserve’s preferred inflation measure, the core personal consumption expenditures index, are both due in the coming days. Together, they could shape expectations for interest rate policy into the summer.

Big tech earnings will also command center stage. Meta Platforms and Microsoft are scheduled to report results after the market closes on Wednesday, followed by Apple on Thursday. The results could test the resilience of this year’s tech-driven rally amid mounting concerns over slowing growth and rising costs.

Watch:  META Earnings Preview: Why AI & Threads Could Fuel the Next Big Surge

Meta’s earnings report is drawing particular scrutiny. Analysts expect Meta to report adjusted first-quarter earnings of $5.24 per share on revenue of $41.34 billion, reflecting strong year-over-year growth. Key areas of focus include advertising revenue trends, cost management, and the company's ramping investments in artificial intelligence. Tariff-related pressures on China-based advertisers and ongoing regulatory risks remain concerns, but investors are expected to focus primarily on Meta’s second-quarter guidance and updates on new monetization efforts. Meta shares, down nearly 9% year-to-date, are trading at historically low valuations relative to the broader market.

The Treasury's Funding Shortfall

Elsewhere, fixed-income markets were closely monitoring the U.S. Treasury Department’s updated borrowing estimates, released Monday afternoon. The Treasury is expected to significantly raise its borrowing projections for the current quarter, potentially to between $255 billion and $500 billion, compared to an earlier forecast of $123 billion issued in February. A larger-than-expected funding need could exert upward pressure on yields, particularly on longer-dated securities like the 10-year Treasury note, which ended last week yielding 4.267%.

The increased borrowing is driven in part by a sharper-than-expected drawdown in the Treasury’s cash balance and persistent fiscal deficits. Investors will also look ahead to Wednesday’s quarterly refunding announcement, where the Treasury will outline its plans for auction sizes and the maturity structure of new debt. Any move toward heavier issuance of longer-term bonds could further tighten financial conditions.

Bond markets remained steady Monday despite the looming update, but analysts warned that funding pressures and political risks tied to rising tariffs could reignite volatility.