Before The Bell - U.S. stocks closed out the holiday-shortened week on a strong up note, with all three of the major averages etching new record highs.

Surging COVID-19 cases recently prompted Tokyo to declare a state of emergency, and call for a last-minute ban on spectators for the upcoming summer Olympics. However, it appears that investors temporarily shrugged off concerns over the increasing spread of the delta COVID-19 variant, instead refocusing their attention to the business upswing that has been fueled by reopening economies. Second-quarter earnings season, which kicks off this week, should support a positive trajectory, with wide expectations for marked improvement compared to 2020’s pandemic-hobbled results.

The Dow Jones Industrials ended Friday’s session with an impressive gain of 448 points, or 1.3%, the broader S&P 500 advanced 48 points (1.1%) while the tech-heavy NASDAQ tacked on 142 points for a gain of 1%. However, it was the small caps that led the day, with the Russell 2000 Index gaining 2.2% for the session. All of the major market sectors were in the green, led by financials (+2.9%), basic materials (2%), and energy (2%). Safe-haven utility stocks posted the smallest gains, ending marginally above breakeven.

The European bourses also showed healthy gains, with France’s CAC-40 tacking on 2.1%, Germany’s DAX up 1.7%, and the U.K.’s FTSE 100 gaining 1.3%. Elsewhere oil prices also closed up, with light sweet crude up 2.3%, to about $74.65 a barrel.  Although it lost a little ground for the week, the commodity is up about 50% for the year to date, as global economic activity continues to recover from the impact of COVID-19.

As we look to the new trading day, stocks in Asian markets had a positive session, but the European bourses are down slightly. Meanwhile, U.S. stock futures are suggesting the major indexes will have a mixed open, while crude oil is down a little over one percent.

Looking ahead, investors will be closely scrutinizing this week’s reports from a number of financial institutions. This includes major banks such as Goldman Sachs (GS), JPMorgan Chase (JPM), and Wells Fargo (WFC). On the industrial side, Alcoa (AA) kicks things off on Thursday, with the aluminum company’s earnings report due after the market close. On the economic front, tomorrow brings the latest reading for the Consumer Price Index, which has become more closely watched of late due to the recent uptick in inflation. This will be followed on Friday by the retail sales figures for June, where a small year-over-year decrease is anticipated. – Mario Ferro

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.