Wall Street experienced a positive turn on Monday, driven by optimistic remarks from President Donald Trump regarding the ongoing U.S.-China trade discussions. Investors cheered as all three major indexes concluded the trading day in positive territory, a hopeful sign as the market eyes the Federal Reserve’s highly anticipated policy meeting scheduled for later in the week.
The Dow Jones Industrial Average (DJI) closed up 49.23 points, marking a modest increase of 0.1% to end the day at 45,883.45 points. The S&P 500 made a more significant leap, rising 0.5% or 30.99 points to finish at 6,615.28 points. This marks an all-time high for the index, as it closes above the 6,600 mark for the first time, buoyed by gains in communication services, technology, and consumer discretionary sectors. The Communication Services Select Sector SPDR (XLC) saw a rise of 1.4%, while both the Technology Select Sector SPDR (XLK) and Consumer Discretionary Select Sector SPDR (XLY) increased by 0.9%. In total, seven of the 11 sectors of the benchmark index were in the green.
The tech-heavy Nasdaq also had a robust performance, climbing by 0.9% or 207.65 points to close at 22,348.75, reaching yet another record-high. Despite this positive market sentiment, the CBOE Volatility Index (VIX) noted a 6.30% increase, settling at 15.69. On the S&P 500, there were more decliners than advancers, with a ratio of 3.3-to-1, although on the NYSE, advancers outnumbered decliners by 1.67-to-1. The Nasdaq also saw a slight favor towards advancing issues with a 1.2-to-1 ratio.
Trading volume on Monday was notably high, with a total of 17.68 billion shares exchanged, surpassing the average of the last 20 sessions which stood at 16.2 billion. Notably, the Nasdaq recorded 117 new highs and 66 new lows, while the S&P 500 witnessed 23 new 52-week highs alongside 11 new lows.
The stock market’s rally was bolstered by Trump’s comments suggesting that the trade talks with China were progressing positively. Ongoing tariff negotiations entered their second day, alongside discussions related to the potential sale of the Chinese-owned social media platform TikTok, which has been a key topic in U.S.-China relations. Although Trump did not mention TikTok directly, he remarked in a post on Truth Social that a deal had been made for a “company” that many American youngsters were reluctant to part with.
Alphabet Inc. (GOOGL) was a significant player on Monday, with shares soaring by 4.5% after the tech giant surpassed a market capitalization of $3 trillion. Meanwhile, shares of Tesla, Inc. (TSLA) rose by 3.6%, following reports that CEO Elon Musk acquired roughly $1 billion worth of the company’s stock the previous week.
As the market gears up for the Federal Open Market Committee’s policy meeting, investors are keenly awaiting potential commentary on interest rate cuts, with expectations set for the central bank to initiate its first rate reduction of the year. This forthcoming event stands as a pivotal focus for investors as they navigate the complexities of the current economic landscape.
