Stocks on Wall Street reached new record highs on Monday, with the S&P 500 rising by 1.2%, the Dow Jones Industrial Average gaining 337 points (0.7%), and the Nasdaq composite increasing by 1.9%. All three indexes set all-time highs for a second consecutive day.
Investor sentiment was boosted ahead of a scheduled meeting between U.S. President Donald Trump and Chinese leader Xi Jinping, raising hopes that discussions could ease tensions between the two countries. U.S. Treasury Secretary Scott Bessent stated there is “a framework” for talks, while President Trump said, “We feel good” about working things out with China.
The ongoing rally in the stock market has been supported by expectations that the Federal Reserve will continue to cut interest rates to support a slowing job market. The Fed is expected to announce its decision on Wednesday, with most traders anticipating a quarter-point reduction in rates for a second straight meeting. However, uncertainty remains due to concerns about inflation potentially accelerating.
A recent monthly inflation report was slightly better than anticipated, which has increased optimism among investors. Still, if the U.S. government shutdown persists, it may delay further updates on inflation data and complicate forecasts regarding future rate cuts.
Corporate earnings also played a role in Monday’s gains. Keurig Dr Pepper’s stock rose 7.6% after reporting quarterly profits that matched analyst expectations, benefiting from higher prices for K-Cup products.
Several major technology companies are set to report their results this week, including Alphabet, Meta Platforms, Microsoft (on Wednesday), Amazon, and Apple (on Thursday). These reports are being closely watched as companies continue significant investments in artificial intelligence technology amid concerns about a potential bubble similar to the dot-com era.
Nvidia’s shares have risen over 42% this year so far; Qualcomm gained 11.1% on Monday after announcing new AI products for data centers.
Mergers and acquisitions activity also influenced trading: Cadence Bank shares increased by 4.4% following news that Huntington Bancshares would acquire it for $7.4 billion in stock; Huntington shares fell by 2.7%. Avidity Biosciences surged by 42.4% after Novartis agreed to purchase it for $12 billion following a planned spinoff of some programs.
At closing, the S&P 500 stood at 6,875.16 points; the Dow Jones at 47,544.59; and the Nasdaq at 23,637.46.
Global markets saw modest increases in Europe and larger gains across Asia: Shanghai stocks climbed by 1.2%, Hong Kong by 1%, Tokyo’s Nikkei jumped by 2.5%, and South Korea’s Kospi rose by 2.6%. The Nikkei crossed above the 50,000 mark for the first time as Japan’s Prime Minister Sanae Takaichi received strong public support for her economic policies favoring defense spending—boosting stocks like Kawasaki Heavy Industries up by 9%.
In bond markets, yields on ten-year Treasuries eased slightly to just under four percent.
Meanwhile, gold prices declined again after reaching near-record levels last week but remain more than fifty percent higher since January.
