U.S. stocks experienced a positive uptick on Monday, buoyed by impressive gains in Asian markets earlier in the day. The S&P 500 saw a rise of 0.5%, moving closer to its previous all-time high achieved two weeks prior. The Dow Jones Industrial Average added 20 points, less than 0.1%, while the Nasdaq composite posted a 0.9% increase.
The modest upticks in the United States followed a remarkable 3.9% surge in Japan’s Nikkei 225, which reached a record high. This rally was driven by a substantial win for Prime Minister Fumio Kishida’s political party in a parliamentary election, enhancing expectations for reforms aimed at stimulating economic growth.
Despite this positive momentum on Wall Street, there remain several underlying concerns. Critics have voiced apprehension that stock valuations have reached unsustainable levels following recent record highs. Additionally, there are ongoing worries about whether the significant investments made by major technology companies in artificial intelligence will yield sufficient profits to justify the expenses.
Among the sectors benefiting from the AI investment boom were chip manufacturers, with Nvidia increasing by 2.4% and Broadcom seeing a rise of 3.3%—these companies played a crucial role in lifting the S&P 500.
In corporate news, grocery giant Kroger saw a notable increase of 3.9% after appointing a former Walmart executive as its new CEO. Offshore drilling firm Transocean reversed early losses to gain 5.9% after announcing plans to acquire Valaris in an all-stock transaction valued at $5.8 billion, causing Valaris to soar by 34.3%.
On the downside, shares of Hims & Hers plummeted 16% following a lawsuit filed by Novo Nordisk, which alleged that the company was unlawfully selling versions of its weight-loss products. This legal action coincided with FDA restrictions on the ingredients necessary for replicating popular weight-loss medications. In a statement, Hims & Hers criticized the lawsuit as an attempt by “Big Pharma” to limit consumer choice. Conversely, Novo Nordisk’s stock rose by 3.6%.
Workday shares dropped by 5.1% following the announcement that CEO Carl Eschenbach is stepping down, with co-founder Aneel Bhusri set to return to the role.
Overall market performance reflected the changes, with the S&P 500 rising by 32.52 points to reach 6,964.82. The Dow Jones Industrial Average increased by 20.20 points, reaching 50,135.87, while the Nasdaq composite gained 207.46 points, climbing to 23,238.67.
In the bond market, Treasury yields remained relatively stable as markets braced for key economic reports later in the week. Investors are looking forward to the government’s latest monthly jobs report on Wednesday, followed by a consumer inflation reading on Friday—both of which could influence the Federal Reserve’s approach to interest rates. While the Fed has paused interest rate cuts, a weaker job market might compel a shift, whereas rising inflation could prolong its current stance.
The U.S. stock market’s proximity to record levels has been partly fueled by expectations of continued rate cuts later this year, as lower rates potentially stimulate economic activity but may also aggravate inflation. The yield on the 10-year Treasury fell slightly to 4.20% from 4.22% recorded late Friday.
Other commodities displayed resilience after a series of turbulent weeks. Gold prices rose by 2%, closing at $5,079.40 per ounce amid significant fluctuations over the past year, having nearly doubled in price. Silver experienced an even wilder swing, increasing by 6.9% on Monday. Bitcoin hovered just below $71,000, recovering from a dip to below $60,000 last week, and remains significantly lower than its record high established in October.
Globally, stock markets mirrored the gains in Asia, with Japan’s success prompting a 4.1% jump in South Korea’s Kospi index, alongside increases of 1.8% in Hong Kong and 1.4% in Shanghai. European markets also enjoyed modest gains, with Germany’s DAX rising by 1.2% and France’s CAC 40 adding 0.6%.
