Investing.com - U.S. stocks opened higher on Monday, as investors looked ahead to a high-profile quarterly earnings report from Nvidia and crucial economic data.
By 09:34 ET (14:34 GMT), the benchmark had climbed by 23 points or 0.4%, the tech-heavy had gained 67 points or 0.3%, and the 30-stock had risen by 168 points or 0.4%.
The main averages on Wall Street fell on Friday and posted weekly losses, weighed down in part by figures showing a decline in U.S. business activity to a 17-month low -- signaling that businesses and consumers were becoming increasingly worried about Trump administration policy actions. Consumer sentiment also slipped to a 15-month low and inflation expectations surged, as households fretted over the impact of U.S. President Donald Trump's tariff plans on their purchasing power.
On the economic calendar, traders will be paying close attention to the U.S. personal consumer expenditures price index for January. The data, due out on Friday, is widely viewed as one of the inflation metrics most preferred by officials at the Federal Reserve.
Nvidia results ahead this week
Nvidia (NASDAQ:) is set to headline the earnings slate this week, with the semiconductor group and figurehead of a surge in investment in artificial intelligence expected to release its results after the market close on Wednesday.
The world's second-most valuable company, Nvidia has become a bellwether for a boom in enthusiasm around AI that has powered a multi-year climb in stock markets. The trend has propelled a skyrocketing in Nvidia's share price by more than 550% over the past two years.
Markets will also be keeping tabs this week on developments around a budget framework laid out by Republicans in both the House of Representatives and Senate. House Republicans are reportedly set to move ahead with a vote early this week on their plan for one large budget bill, according to Roll Call.
"[O]ur main concern has been and still is Washington, specifically that the prolonged period [of] extreme uncertainty at a time of elevated valuations will (at the least) place a lid on the market and prevent further gains," analysts at Vital Knowledge wrote in a note to clients.
"It looks like there won’t be clarity on a number of Washington-related fronts until at least the summer, which only exacerbates the cautious outlook."
German election in focus
Investors were also assessing the results from a crucial election in Germany on Sunday. The conservative Christian Democratic Union and its Bavarian sister party garnered the most backing in the vote, although it remained unclear how lawmakers would approach establishing a new coalition government.
The far-right Alternative for Germany (AfD) party won the second-largest amount of support from German voters, followed by current Chancellor Olaf Scholz's centre-left Social Democrats. Germany's mainstream parties have said they would not work with AfD, who has notably received the backing of Tesla (NASDAQ:) CEO and close Trump associate Elon Musk.
Friedrich Merz, the likely next chancellor of Germany, will move to begin establishing a coalition government during a time when the country's economy -- a crucial cog in Europe's economic engine -- is sputtering and security concerns have been heightened after the Trump administration's recent negotiations with Russia on a potential Ukraine peace deal.
While there are still several outcomes to the coalition discussions, analysts have previously suggested that a concentration of control of Germany's national parliament could support economic growth because it would help clear the path for some fiscal easing initiatives.
The pan-European climbed slightly on Monday and the in Germany rose by 1.1%.
Alibaba 's AI spending plans
In corporate news, Alibaba Group (NYSE:) (HK:) announced plans on Monday to invest 380 billion yuan ($52.4 billion) over the next three years to boost its cloud computing and AI infrastructure, marking its largest technology investment to date.
The move underscores Alibaba’s ambition to lead in AI-driven growth and solidify its position as a global cloud provider, the company said.
Hong Kong-listed shares in the e-commerce giant closed lower, while the stock's U.S. listing ticked down in early trading.
Elsewhere, Warren Buffett's Berkshire Hathaway (NYSE:) reported a third-straight all-time peak in full-year profits and lifted its cash stake up to $334.2 billion. The 94-year-old Buffett also told shareholders that "it won't be long" before Vice Chairman Greg Abel takes over at the helm of the investment conglomerate.
Microsoft (NASDAQ:) has started to cancel leases for a significant amount of data capacity in the U.S., in a sign that the tech titan may be responding to concerns surrounding possible overspending on its AI capabilities, according to analysts at TD Cowen. Shares were marginally higher.
Nike (NYSE:)'s stock price climbed after the athletic apparel firm's rating was upgraded to "buy" from "hold" at Jefferies, with the analysts suggesting the company is well-positioned for a rebound in performance over the next two years.
Gold edges higher
Gold prices advanced, remaining close to recent peaks, as safe-haven demand was boosted by uncertainty over the U.S. economic outlook and trade tariffs.
The yellow metal clocked a series of record highs last week, benefiting from sustained haven buying following fresh tariff threats from Trump. Worries over the direction of the U.S. economy, exacerbated by the weak purchasing managers' index and consumer sentiment readings on Friday, also fueled gold demand.
Meanwhile, oil prices were muted as investors weighed the potential for a peace deal to end the war in Ukraine and expectations for the resumption of exports from oilfields in Kurdistan.
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