S&P 500 flat, Nasdaq slips as Micron drops 4% on China chip competition; bank earnings and CPI due this week

The S&P 500 was little changed Monday morning, Oct. 12, as Wall Street opened a heavy week of bank earnings and inflation data.

The S&P 500 traded about 0.1% lower. The Dow Jones Industrial Average was up 222 points, or 0.4%. The Nasdaq Composite was down 0.3%. At the open, the S&P was marginally higher and the Dow up about 192 points.

Micron falls, Salesforce rises

Micron Technology shares dropped about 4% and dragged on the Nasdaq. Investors were assessing growing competition from China's CXMT, which reported progress on a new chip structure.

Micron's most recent quarterly report was strong on paper: fiscal fourth-quarter revenue above $54 billion and a first-quarter revenue guide of $61.5 billion. A China-based rival closing the technology gap is now the focus.

Salesforce gained about 2% after Bank of America upgraded the stock by two notches. That helped lift the Dow.

The backdrop is strong. The S&P 500 and Nasdaq closed at record highs last week. The Nasdaq has now gained four straight weeks. The Dow and S&P 500 each posted their second weekly gain in three.

Oil jumps on a ceasefire that did not hold

Oil rose again. West Texas Intermediate futures gained about 2% to roughly $93 a barrel. Brent gained about 2% to around $106.

Over the weekend, President Donald Trump announced an "energy ceasefire" between Russia and Ukraine, with both sides to stop targeting each other's energy infrastructure. Ukrainian President Volodymyr Zelenskyy said Moscow had already violated it. Russia struck Ukrainian power infrastructure despite the announcement.

Trump also told reporters he is considering joining Saudi Arabia in its fight against the Iran-backed Houthis in Yemen. That followed another deadly attack on Riyadh's international airport. The remarks raised the prospect of wider conflict in the region.

JPMorgan global economics chief Bruce Kasman has flagged the cost side of this. "Oil prices remain higher than we had assumed as shipping costs have soared and product prices are even higher," he said.

Earnings are expected to be big, but guidance will matter more

FactSet's John Butters says the S&P 500 is on track for 29.6% earnings growth in the third quarter. It would be the fourth straight quarter above 25%, driven by the AI data center buildout.

Strong numbers may not be the test. Brian Leonard, portfolio manager of the Keeley Gabelli Small Cap Dividend Fund, said investors have narrowed in on a few questions: "Can this company withstand what's happening? Pass along, continue to grow margins, and the future is going to be better than the most recent past."

That is a direct reference to higher fuel and borrowing costs. Management commentary on how customers are coping with both will count for more than the backward-looking quarter.

The week's calendar

JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo are scheduled to report Tuesday, Oct. 13. Bank of America and Morgan Stanley are also expected to report this week.

The September consumer price index is due Wednesday, Oct. 14, and the producer price index Thursday, Oct. 15. Those readings could shape expectations for the Federal Reserve's interest-rate path.

Elevated Treasury yields remain part of the equation. The CNBC-TV18 report on the open lists yields, geopolitical risk and AI-related concerns among the factors investors are weighing against further gains.

Four years into the bull run

This week marks four years since the S&P 500 hit its bull-market starting point, a closing low of 3,577.03 in October 2022. The index has more than doubled since.

This week will test whether bank results and the CPI print can keep the rally going while oil sits near $106 Brent and the Russia-Ukraine ceasefire is already being contested.