Stocks reached new heights as trading commenced in a week marked by Federal Reserve activity, buoyed by optimism regarding U.S.-China trade relations. The technology sector saw substantial gains, driven by anticipation surrounding upcoming earnings reports from major companies. By the end of the trading day, the Dow Jones Industrial Average had climbed 0.7%, closing at 47,544, while the S&P 500 rose by 1.2% to finish at 6,875. The Nasdaq Composite soared by 1.9%, reaching a new record of 23,637. Notably, these milestones marked new all-time highs for all three indices.
Over the weekend, news broke that U.S. and Chinese officials had developed a framework for a potential trade agreement. President Donald Trump is scheduled to meet with Chinese President Xi Jinping at the APEC summit in South Korea on Thursday, and market participants are hopeful that the discussions will yield positive outcomes.
During an appearance on NBC’s “Meet the Press,” U.S. Treasury Secretary Scott Bessent expressed optimism about the upcoming meeting, stating, “I believe that we have the framework for the two leaders to have a very productive meeting for both sides.” Reports suggest that negotiations have touched on critical issues, including export controls, reciprocal tariff extensions, and the popular social media platform TikTok. José Torres, a senior economist at Interactive Brokers, pointed out that investor enthusiasm is growing as both leadership teams appear committed to setting the stage for a trade treaty, sparking a “risk-on” sentiment in financial markets.
Prominent tech giants Apple and Microsoft drew significant attention as both inch closer to a $4 trillion market capitalization. As of the close on Monday, Apple’s valuation stood at approximately $3.989 trillion, while Microsoft’s reached $3.951 trillion. Nvidia remains the only company to have crossed the $4 trillion mark, achieving this feat in July. Apple is set to reveal its fiscal fourth-quarter results after the market closes on Thursday, and analysts are particularly interested in the company’s forward guidance regarding revenue growth amid ongoing tariff pressures and uncertainties surrounding its artificial intelligence strategy.
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, highlighted the significance of Apple’s guidance for investors. Meanwhile, Microsoft is preparing for its fiscal first-quarter earnings report expected Wednesday evening. Bernstein analyst Mark Moerdler expressed optimism about Microsoft’s potential performance, anticipating strong growth in Azure’s revenue driven by ongoing adoption and the winding down of Windows 10 support.
While the onset of earnings season has been generally strong, analysts caution that the market is becoming increasingly discerning. Daniela Sabin Hathorn, a senior market analyst at Capital.com, noted, “The market has become less forgiving,” suggesting that while results may be solid, guidance will play a crucial role in shaping investor sentiment due to elevated valuations.
In other tech news, Qualcomm stock surged by 11.1% following the announcement of the company’s entry into the artificial intelligence chip market. Qualcomm revealed plans to launch its AI200 chip next year and the AI250 chip by 2027, generating competitive pressure on existing players like Nvidia and Advanced Micro Devices (AMD), which also saw a 2.7% increase on Monday. Qualcomm’s new chips are designed to serve enterprises and developers in deploying generative AI solutions, further solidifying the company’s position in the tech landscape. Investors will be looking for more strategic insights when Qualcomm reports its fiscal fourth-quarter earnings after next Wednesday’s market close.
