Wall Street experienced another day of record highs on Monday, as the major indices showcased notable gains. The Standard & Poor’s 500 surged by 0.5%, surpassing its previous all-time high established just last week. Additionally, the Dow Jones industrial average rose by 49 points, or 0.1%, while the Nasdaq composite increased by 0.9%, also setting a new record.
Key player Tesla led the market’s rally, with its shares climbing 3.6% following a significant stock purchase by CEO Elon Musk, who bought around $1 billion worth through a trust. This move sent a positive signal to investors, especially given that Tesla had opened the day with a slight year-to-date loss. Meanwhile, Alphabet, Google’s parent company, emerged as a major contributor to the S&P 500’s gains, experiencing a significant 4.5% uptick that elevated its total market capitalization to over $3 trillion. It now ranks alongside Nvidia, Microsoft, and Apple as the only other companies on Wall Street valued at that level.
This week is pivotal for investors, culminating in a key event on Wednesday when the Federal Reserve is set to announce its latest interest rate decision. Analysts broadly expect this to be the first interest rate cut of the year, which could reinvigorate the slowing job market. The optimism surrounding a potential rate cut has already propelled the markets to new heights, but the potential for disappointment exists if the Fed’s approach is less aggressive than traders anticipate.
Attention will likely focus more on Fed Chair Jerome Powell’s press conference following the announcement than on the decision itself. Here, he is expected to discuss the Fed’s forecasts for interest rates and the overall economy. One of the significant challenges for the Fed is managing inflation, especially in light of tariffs implemented during the Trump administration, which could complicate the outlook as lower interest rates may spur inflation, already difficult to keep below the 2% target.
Concerns are also mounting over the health of the job market. A significant slowdown could lead to a recession, which might drastically undermine corporate profits, negating the benefits of rate cuts in the short term. Trump has been vocally advocating for more substantial interest rate reductions, frequently criticizing Powell and even attempting to influence the Fed’s structure.
On an individual stock level, Intel saw a notable gain of 2.9% as it revised its forecast for expenses downward following the sale of a majority stake in its Altera business. In contrast, Hain Celestial experienced a sharp 24.7% drop after reporting a loss greater than the previous year’s results. Interim CEO Alison Lewis acknowledged the need for stabilization efforts after a performance that fell short of expectations.
Meanwhile, Alaska Air Group faced a 6.7% decline due to rising fuel costs, predicting third-quarter results at the lower end of its forecasts. The airline cited increased operational expenses prompted by adverse weather and air-traffic delays, although ticket demand remained strong for premium seats.
Nvidia reported a slight decrease of less than 0.1% after being accused of violating antitrust laws in China, which has prompted further investigations without immediate penalties stated by Chinese regulators.
By the close of trading, the S&P 500 finished up 30.99 points to 6,615.28. The Dow increased by 49.23 to close at 45,883.45, while the Nasdaq composite climbed 207.65 to settle at 22,348.75. In the bond market, Treasury yields softened further amid expectations of rate cuts from the Fed. The yield on the 10-year Treasury dipped to 4.03%, down from 4.06%.
Adding to the economic landscape, a report released on Monday indicated a contraction in manufacturing activity in New York state, defying expectations for continued growth and marking the first month of decline since June. The next economic update is anticipated on Tuesday, with data on retail spending expected to provide additional insights. Internationally, France’s CAC 40 climbed 0.9%, while other European and Asian markets showed more modest movements.
