The S&P 500 Index ($SPX) (SPY) on Monday closed up +0.64%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.23%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.77%. March E-mini S&P futures (ESH26) rose +0.64%, and March E-mini Nasdaq futures (NQH26) rose +0.77%.
Stock indexes settled higher on Monday, with the S&P 500 posting a 1-week high and the Dow Jones Industrial Average posting a new all-time high. Optimism about AI spending boosted chipmakers and data storage companies on Monday. Also, energy companies rallied on Monday after President Trump said a team of US officials will “run” Venezuela after capturing Venezuelan President Maduro and that the US requires “total access” to the country, including its oil reserves. In addition, mining stocks surged as escalating geopolitical risks in South America boosted demand for precious metals as haven assets, with gold climbing more than 2% and silver soaring more than 7%.
Lower bond yields were another supportive factor for stocks on Monday, as the 10-year T-note yield fell by -3 bp to 4.16%. Monday’s US economic news boosted bond prices after the Dec ISM manufacturing index unexpectedly fell -0.3 to 47.9, weaker than expectations of an increase to 48.4 and the steepest pace of contraction in 14 months.
Dovish comments on Saturday from Philadelphia Fed President Anna Paulson were supportive for equity and bond prices after she said she sees “inflation moderating, the labor market stabilizing, and growth coming in around 2% this year. If all that happens, then some modest further adjustments to the funds rate would likely be appropriate later in the year.”
However, Monday’s comments from Minneapolis Fed President Neel Kashkari were slightly hawkish for Fed policy when he said that US interest rates may be “close to neutral” for the economy.
Strength in European stocks on Monday provided carryover support to US equity markets after the Euro Stoxx 50 rallied to a new record high.
The market’s focus this week will be on US economic news. …
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