Investor Optimism Improves Slightly Ahead Of Big Earnings, Fed's Policy Decision

The CNN Money Fear and Greed index showed some improvement in the overall market sentiment, while the index remained in the "Extreme Greed" zone on Monday.

U.S. stocks closed higher on Monday, with the S&P 500 rising to a new record ahead of various mega-cap tech earnings reports and the Fed’s interest-rate decision. The Federal Open Market Committee will start its two-day policy meeting today.

Shares of iRobot IRBT dipped around 8.8% on Monday after the company and Amazon.com, Inc. AMZN decided to terminate their acquisition agreement.

On the economic data front, the Federal Reserve Bank of Dallas’s general business activity index for manufacturing in Texas fell 17 points to a reading of -27.4 in January.

Most sectors on the S&P 500 closed on a positive note, with consumer discretionary, communication services, and information technology stocks recording the biggest gains on Monday. However, energy stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed higher by around 224 points to 38,333.45 on Monday. The S&P 500 rose 0.76% at 4,927.93, while the Nasdaq Composite jumped 1.12% at 15,628.04 during Monday’s session.

Investors are awaiting earnings results from Microsoft Corporation MSFT, General Motors Company GM, Alphabet Inc. GOOG GOOGL and Pfizer Inc. PFE today.

At a current reading of 76.9, the index remained in the "Extreme Greed" zone on Monday, versus a prior reading of 76.4.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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