After moving sharply higher early in the session, stocks continued to turn in a strong performance throughout the trading day on Monday. The major averages added to the strong gains posted last week, reaching new record closing highs.
The major averages saw further upside going into the end of the day, reaching new highs for the session. The Nasdaq surged 432.59 points or 1.9 percent to 23,637.46, the S&P 500 (SPI:SP500) jumped 83.47 points or 1.2 percent to 6,875.16 and the Dow climbed 337.47 points or 0.7 percent to 47,544.59.
The rally on Wall Street came amid optimism about a potential U.S.-China trade deal ahead of a highly anticipated meeting between President Donald Trump and his Chinese counterpart Xi Jinping later this week.
Treasury Secretary Scott Bessent met with Chinese officials in Malaysia over the weekend and said he believes the talks have resulted in a “very successful framework” for Trump and Xi to discuss on Thursday.
Bessent also indicated he expects China to resume its purchases of U.S. soybeans and delay the export controls on rare earths that contributed to the recent increase in tensions.
On his way to Japan, Trump also expressed optimism about reaching a trade deal with China after signing separate trade and mineral agreements with his Malaysian and Cambodian counterparts.
Optimism about the outlook for interest rates may also have contributed to the strength on Wall Street ahead of the Federal Reserve’s monetary policy announcement this week.
With the Fed widely expected to lower rates by another quarter point when it announces its latest decision on Wednesday, traders are likely to pay close attention to the accompanying for clues about the likelihood of further rate cuts.
CME Group’s FedWatch Tool is currently indicating a 97.8 percent chance the Fed will lower rates by a quarter point this week and a 93.0 percent chance of another quarter point rate cut in December.
Sector News
Semiconductor stocks turned in some of the market’s best performances on the day, with the Philadelphia Semiconductor Index surging by 2.7 percent to a new record closing high.
Qualcomm (NASDAQ:QCOM) helped lead the sector higher, spiking by 11.1 percent after announcing new artificial intelligence accelerator chips to compete with Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD).
Considerable strength also emerged among telecom stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca North American Telecom Index.
Transportation, steel and software stocks also saw notable strength, while gold stocks moved sharply lower along with the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Monday. Japan’s Nikkei 225 Index surged by 2.5 percent, while China’s Shanghai Composite Index jumped by 1.2 percent.
The major European markets showed more modest moves to the upside on the day. While the German DAX Index rose by 0.3 percent, the French CAC 40 Index crept up by 0.2 percent and the U.K.’s FTSE 100 Index inched up by 0.1 percent.
In the bond market, treasuries regained ground over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed unchanged at 3.997 percent after reaching a high of 4.033 percent.
SOURCE: RTTNEWS