U.S. stocks are experiencing a slight upward movement in mixed trading on Monday, following a significant surge in Asian markets earlier in the day and a strong finish for Wall Street last week. The S&P 500 climbed 0.6%, edging closer to its all-time high set just two weeks ago. Meanwhile, the Dow Jones Industrial Average registered a modest gain of 21 points, representing less than 0.1%, as of 2:05 p.m. Eastern time, with the Nasdaq composite up by 1%.
This modest uptick in the U.S. market comes in the wake of a notable 3.9% increase in Japan’s Nikkei 225, which reached a new record following a decisive victory for the ruling political party in parliamentary elections. Analysts suggest that this outcome will empower Prime Minister Sanae Takaichi to implement reforms aimed at invigorating the economy and financial markets.
Despite the recent rally, concerns linger on Wall Street. Critics are voicing apprehensions that stock valuations may have become excessively high in light of the recent record-breaking performances. Additionally, there are growing worries regarding the massive investments by Big Tech and other sectors in artificial intelligence, with skepticism about whether these expenditures will yield sufficient profits to justify the costs.
The S&P 500 displayed a mix of gainers and losers, although several AI-related stocks lent support to the market’s positive trajectory. Notably, chipmakers enjoyed a boost, with Nvidia shares rising by 3% and Broadcom climbing 4.4%, making them significant contributors to the S&P 500’s upward momentum.
In company-specific news, Kroger saw its shares increase by 3.5% following the appointment of a former Walmart executive as its new CEO. Conversely, Transocean reversed its earlier losses to rise by 5.3% after announcing it would acquire Valaris in a $5.8 billion all-stock deal, prompting a substantial 32.8% surge in Valaris’s stock.
On the downside, Hims & Hers faced a sharp decline of 17.4% after Novo Nordisk filed a lawsuit accusing the company of unlawfully selling versions of its weight-loss treatments. This lawsuit came after the U.S. Food and Drug Administration imposed restrictions on the ingredients necessary to replicate popular weight-loss medications. Hims & Hers responded by alleging that “Big Pharma is weaponizing the U.S. judicial system to limit consumer choice.”
In contrast, shares of Novo Nordisk rose by 4% in response to the news. Workday’s stock fell by 6.2% following the announcement that CEO Carl Eschenbach is stepping down, with co-founder Aneel Bhusri set to return as chief executive.
In the bond market, Treasury yields remained relatively stable as investors await several key economic reports scheduled for later in the week. The U.S. government is set to release an update on the job market on Wednesday, followed by the latest consumer-level inflation figures on Friday. These reports could influence expectations regarding the Federal Reserve’s approach to interest rates. While the Fed has paused rate cuts, a softening job market might prompt a quicker resumption of cuts, whereas persistent inflation could delay this action.
As for the bond market, yields on the 10-year Treasury eased from 4.22% to 4.20%. Other previously volatile markets showed signs of stabilization, with gold prices rising by 2% to settle at $5,079.40 per ounce, and silver experiencing a significant jump of 6.9% on Monday. Bitcoin fluctuated, dipping back toward $70,000 after surpassing $71,000 over the weekend, having previously dropped below $60,000 last week.
Globally, stock indexes surged across Asia in response to Japan’s monumental gains, with South Korea’s Kospi climbing 4.1%, and increases of 1.8% in Hong Kong and 1.4% in Shanghai. European markets exhibited more moderate gains, with Germany’s DAX rising by 1.2% and France’s CAC 40 increasing by 0.6%.
