U.S. stocks reached new highs on Monday as Wall Street’s rally continued for a third consecutive day. The S&P 500 increased by 0.4% after recovering from an earlier loss, closing at 6,693.75. The Dow Jones Industrial Average rose by 66 points, or 0.1%, ending at 46,381.54, while the Nasdaq composite gained 0.7% to close at 22,788.98.
“Every time the market seems to be running out of momentum, it fools most of us by pushing to higher heights,” said Jay Woods, chief market strategist at Freedom Capital Markets.
Nvidia led gains among major companies with its stock rising by 3.9%. The increase followed the announcement of a partnership between Nvidia and OpenAI to develop future artificial intelligence models; Nvidia will invest up to $100 billion in this initiative.
Oracle shares climbed by 6.3% after news that the company would receive access to TikTok’s algorithm for U.S. users as part of a government agreement intended to keep TikTok operational in the country. Oracle also announced leadership changes: Clay Magouyrk and Mike Sicilia were named CEOs, and current CEO Safra Catz will become executive vice chair of the board.
Mergers and acquisitions contributed significantly to trading activity on Monday:
– Pfizer revealed plans to acquire Metsera in a deal valued initially at $4.9 billion, focused on developing obesity treatments.
– Metsera’s stock surged by 60.7%, while Pfizer’s share price remained mostly unchanged.
– ODP Corporation, which operates Office Depot and Office Max stores, jumped 32.9% after Atlas Holdings agreed to buy it for about $1 billion.
– Anywhere Real Estate saw its shares soar by 45.5% following Compass’ announcement that it would purchase the company behind Coldwell Banker and Corcoran brands in an all-stock deal worth approximately $10 billion including debt; however, Compass shares dropped by 15.7%.
The crypto sector experienced losses with Coinbase Global falling by 3.1%. Despite this decline, Coinbase has risen more than 33% since January due to strong interest in cryptocurrencies amid expectations that the Federal Reserve will reduce interest rates.
The Federal Reserve made its first rate cut of the year last week and signaled additional reductions could occur through the end of this year and into next year if economic conditions warrant them.
However, some concerns remain about whether these cuts will continue as expected since inflation remains above the Fed’s target rate of two percent—a key indicator is scheduled for release Friday that may show inflation accelerating slightly last month.
Overseas markets showed mixed results: Japan’s Nikkei index rose one percent while Hong Kong’s Hang Seng fell nearly one percent.
In bond markets, Treasury yields were stable with the yield on ten-year notes holding steady at 4.14%.
