Stock Market Today: Stocks Climb After Spotify Job Cuts
Spotify became the latest company to announce layoffs, while Salesforce climbed on activist investor news.
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Tech stocks led the way higher Monday as investors prepared for a heavy batch of corporate earnings reports due out this week.
Roughly 20% of S&P 500 companies will release their quarterly results over the next five days, with tech giant Microsoft (MSFT, +1.0%) and electric vehicle maker Tesla (TSLA, +7.7%) among the notable names on this week's earnings calendar. But, the focus was on a big layoff announcement from audio streaming service Spotify (SPOT, +2.1%).
Today, Spotify said it will lay off 6% of its global workforce, or around 600 employees. In a memo sent to staff, CEO Daniel Ek said the job cuts were an effort to bring costs in line amid a challenging economic environment. This follows in the footsteps of several other tech and communication services companies like Microsoft, Meta Platforms (META, +2.8%) and Alphabet (GOOGL, +1.8%) that recently announced layoffs.
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Salesforce (CRM, +3.1%) was another big gainer today after a report in The Wall Street Journal indicated Elliott Management has taken a "big stake" in the software-as-a-service (SaaS) company.
Semiconductor stocks were also a pocket of strength. Advanced Micro Devices (AMD, +9.2%) outpaced its peers after Barclays analyst Blayne Curtis upgraded the stock to Overweight from Equal Weight, the equivalents of Buy and Hold, respectively. Curtis said AMD's Genoa and Bergamo platforms will likely take market share away from Intel (INTC, +3.6%), and believes the company could get a boost once Facebook parent Meta Platforms ramps up spending later this year.
As for the major indexes, the tech-heavy Nasdaq jumped 2.0% to 11,364, the broader S&P 500 gained 1.2% to 4,019, and the blue-chip Dow Jones Industrial Average rose 0.8% to 33,629.
The Safest Vanguard Funds to Buy
Today's price action likely sparked a sigh of relief among investors. However, the fact remains that the major benchmarks are still in a bear market. And amid expectations that the U.S. will enter a recession later this year – Kiplinger, for its part, has the odds of a recession at about 60% – stocks could stay in a downtrend for the time being.
While it's true that this bear market will eventually end, "investors should not assume that the easy times in the market are coming back," says David Bahnsen, chief investment officer at wealth management firm The Bahnsen Group. "We expect enhanced volatility and a focus on cash flow and quality for the foreseeable future."
As such, Bahnsen says it is "very important to pursue high-quality assets," like the best dividend stocks. Other defensive strategies included targeting stocks in the healthcare and consumer staples sectors. Investors that want more diversification in their portfolio hedges have plenty of options among the best bear market ETFs. But for those looking for below-average expenses, consider the safest Vanguard funds to own in a bear market. The names featured by Vanguard offer short-term defense across a variety of strategies and come with the investment advisor's low costs to boot.
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