U.S. stocks rebounded on Monday, with the S&P 500 rallying 1.2% after experiencing its worst week in nearly a year and a half. The Dow Jones Industrial Average also rose 1.2%, and the Nasdaq composite gained 1.2%. Boeing saw a 3.4% increase after reaching a tentative deal with its largest union on a new contract, avoiding a potential strike that could have shut down aircraft production. Nvidia and other Big Tech companies also performed well, with Nvidia climbing 3.5% and leading the market upward. Treasury yields initially rose but later pared their gains after a volatile week in the bond market sparked by concerns about the U.S. job market.
The Federal Reserve is planning to lower interest rates later this month, shifting its focus from high inflation to protecting the job market and avoiding a recession. While rate cuts typically give stock prices a boost, an economic downturn could outweigh any benefits by dragging down company profits. Wall Street is hopeful that the Fed’s easing will prevent a recession, as there are currently no significant vulnerabilities in household or corporate balance sheets. Palantir Technologies and Dell Technologies saw positive movement in their stock prices after being added to the S&P 500 index, while Apple’s stock remained relatively flat following the unveiling of its latest iPhone model tailored for artificial intelligence.
In other market news, trading in Big Lots was halted after the discount retailer filed for Chapter 11 bankruptcy protection and announced plans to sell its assets. The S&P 500 rose 62.63 points to 5,471.05, the Dow gained 484.18 to 40,829.59, and the Nasdaq composite gained 193.77 to 16,884.60. The bond market saw the 10-year Treasury yield edge down slightly, reflecting the cautious sentiment in the market. Looking ahead to the upcoming week, investors will be monitoring monthly updates on inflation as well as the job market data, which has become more crucial in determining market trends.
Stock markets in Europe rose after falling in Asia, with Japanese stocks slipping and Chinese stocks racking up losses due to worse-than-expected inflation data. Despite the volatility in global markets, U.S. stocks showed resilience on Monday, bouncing back from recent losses. As investors navigate uncertainties around interest rates, inflation, and economic growth, the performance of key companies like Boeing, Nvidia, and Apple will continue to shape market sentiment. With the Federal Reserve set to make crucial decisions on monetary policy in the coming months, the market remains cautiously optimistic about the future.
