U.S. Stocks End Monday in Green
(MENAFN) U.S. equities climbed on Monday, driven by weaker economic data that sharply increased expectations for a Federal Reserve interest rate reduction at this Wednesday’s policy meeting.
The Dow Jones Industrial Average edged up 49.23 points, or 0.11%, closing at 45,883.45. The S&P 500 rose 30.99 points, or 0.47%, marking its first-ever settlement above 6,600 at 6,615.28. The Nasdaq Composite surged 207.65 points, or 0.94%, to a record 22,348.75.
Out of the 11 major sectors in the S&P 500, six finished lower. Consumer staples and health care declined 1.15% and 1.01%, respectively. In contrast, communication services and consumer discretionary led gains with advances of 2.33% and 1.1%.
Tesla shares jumped 3.62% following CEO Elon Musk’s announcement of his largest open market stock purchase ever, a $1 billion acquisition—the first major buy since 2020.
Major technology stocks broadly pushed higher. Alphabet surged 4.3%, pushing its market value above $3 trillion for the first time. Oracle increased 3.43%, while Microsoft, Apple, Amazon, Meta Platforms, and Broadcom each rose over 1%. Nvidia was the lone exception, with a slight decline.
Investor sentiment was also bolstered by recent data signaling a softening labor market and modest inflation, strengthening bets on a Fed rate cut. According to the CME FedWatch tool, futures implied a 95.8% chance of a 25 basis point reduction and a 4.2% chance of a larger 50 basis point cut.
Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said, "The market is fully expecting the Fed to start a series of rate cuts at this week's meeting," adding, "Much of today's action is traders getting positioned for Wednesday's announcement. This could be a 'Buy the rumor, sell the fact' event but it is safe to say market participants likely to not want to go into Wednesday short the SPX."
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