U.S. Stocks Waver Between Small Gains and Losses

Stocks have had a turbulent start to the year, amplified in recent days by extreme moves in big tech stocks. Last week saw a record-breaking decline in Meta Platforms shares and the biggest rise since 2015 for Amazon.com shares, after the companies posted earnings. Friday’s better-than-expected jobs report also turned traders’ attention back to central-bank policy, which is set to tighten as the economy continues to recover.   

On Monday, major indexes wavered between small gains and losses before turning higher toward the end of the day. Some analysts said the latest earnings season has helped draw investors back into stocks in recent sessions. Last week, the S&P 500 capped off its best week since December after several twists and turns.

“We think the earnings season has been pretty constructive,” said Greg Boutle, head of U.S. equity and derivative strategy at BNP Paribas.

Companies scheduled to post results this week include

Pfizer

and

KKR

on Tuesday and Uber Technologies and Walt Disney on Wednesday.

Coca-Cola,

PepsiCo

and

Twitter

are slated for Thursday. 

Despite the recent rebound, it’s been hard to impress investors this earnings season. Companies that are beating estimates are performing worse than they had historically, while those that are missing estimates are being punished,

JPMorgan Chase & Co.

strategists wrote in a note to clients Monday. This is one of several signs that investors have grown overly bearish in recent weeks, according to JPMorgan’s Marko Kolanovic.

“As overly bearish sentiment clears, we expect the market to lift,” Mr. Kolanovic said.

Shares of Meta and

Netflix

dropped Monday, losing 3.9% and 1%, respectively. Amazon continued to rise, adding 1.4%. The moves continue a recent divergence in so-called FAANG stocks that have led investors to shift how they trade the hot tech group.

“We’ve been taking advantage of some volatility,” said Mike Bailey, director of research at FBB Capital Partners. “We’ve been adding to some of the tech names during the past few weeks.”

In corporate news, Peloton shares soared 23% after The Wall Street Journal reported that the stationary-bike company was drawing interest from Amazon and other potential suitors.

Spirit Airlines

added 17% after it said it was merging with Frontier Group.

Tyson Foods

climbed around 12% after it said it expected its sales for the year to be at the upper end of its guidance.

Hasbro

slipped around 0.5% after reporting revenue and profit that beat Wall Street’s estimates.

The yield on the 10-year Treasury note hovered at 1.914%, from 1.930% Friday.

“Markets have been repricing, as seen in the move up in yields, but I think we’re arriving at a point where it’s difficult to price in a much more hawkish outlook than we have today. We could now see a bit of stabilization,” said

Esty Dwek,

chief investment officer at FlowBank.

Cryptocurrencies gained Monday, with bitcoin rising 5% from its level at 5 p.m. ET on Friday. It traded around $42,800. The digital currency rose above $40,000 Friday after spending two weeks below that level and has maintained its gains. 

Overseas, the pan-continental Stoxx Europe 600 added 0.7%. European government bond yields extended last week’s gains as markets continued to price in hawkish signals from the European Central Bank’s press conference on Thursday. Benchmark 10-year Italian and Greek bond yields rose to the highest levels since spring 2020.

In Asia, major benchmarks were mixed. The Shanghai Composite Index climbed 2%, reopening after China’s New Year holiday week, despite a private gauge of China’s services sector slipping to a five-month low. The gain was its best one-day rise since May.

Hong Kong’s Hang Seng Index closed roughly flat and Japan’s Nikkei 225 declined 0.7%. 

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Gunjan Banerji at gunjan.banerji@wsj.com