U.S. stock market update/ S&P 500 record/ stock market near highs/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ U.S. stock indexes hovered near record highs on Monday, with the S&P 500 up 0.1% and the Dow Jones climbing 70 points. Investors await key economic reports, including updates on U.S. business activity and consumer spending, which could influence market trends. Financial markets continue to rise following the Federal Reserve’s recent interest rate cuts.
Wall Street Drifts Around Record Highs: Quick Look
- S&P 500: Rose 0.1%, nearing its record set last Thursday.
- Dow Jones: Climbed 0.2%, extending gains after Friday’s record high.
- Nasdaq: Gained 0.1% as of early morning trading.
- Top Movers: Constellation Energy (+4.3%) after Friday’s surge, Intel (+1.3%) following reports of potential Qualcomm acquisition interest.
- Focus on Economic Data: Key reports on business activity and consumer spending are expected later this week.
- Bond Market: 10-year Treasury yield increased slightly to 3.75%, while the two-year yield dipped to 3.59%.
Wall Street Holds Near Record Highs as Investors Await Economic Data
Deep Look
On Monday, U.S. stock indexes drifted near their all-time highs in calm early trading, with the S&P 500 up 0.1%, continuing its momentum after closing its fifth winning week in the last six. The Dow Jones Industrial Average also saw modest gains, up 0.2%, following a record close on Friday. The Nasdaq composite edged 0.1% higher, indicating general steadiness across the major indexes as investors brace for key economic reports this week.
Leading the market was Constellation Energy, which jumped 4.3% following its 22.3% surge on Friday. The company announced it would restart the Three Mile Island nuclear plant and supply the energy to Microsoft. This news continued to buoy Constellation’s stock performance, contributing to Monday’s gains.
Another notable mover was Intel, rising 1.3% after reports emerged that Qualcomm was exploring the possibility of acquiring parts or all of the company. Qualcomm’s stock, however, remained relatively flat amid the acquisition rumors.
Market Sentiment After Fed Interest Rate Cuts
The broader financial markets have been steadily climbing since the Federal Reserve’s significant interest rate cut last week—the first in over four years. The Fed slashed its benchmark rate by an unusually large amount, fueling optimism that lower rates could give the U.S. economy the boost it needs to stave off a recession.
With inflation no longer the primary concern—after having fallen significantly from its peak in 2022—attention has shifted to the job market. While the Fed’s recent actions aim to support economic growth and job stability, some critics argue the central bank may have acted too late. Job growth has already shown signs of slowing, and skeptics point out that stock prices may be inflated, given the current economic climate.
Despite these concerns, the Fed has committed to further interest rate cuts this year and next, aiming to prop up both the labor market and the broader economy. Investors will be closely watching several key economic reports due this week, which could provide further insights into the state of the U.S. economy.
Key Economic Reports Coming Up
This week’s economic calendar includes a preliminary report on U.S. business activity, expected later in the morning, which could provide valuable insights into the health of the U.S. economy. Other significant reports expected later this week include the final reading of U.S. economic growth in the spring and an update on consumer spending patterns.
The market’s focus has shifted toward the job market, reflecting fears of an economic slowdown. In previous years, inflation dominated market conversations, but with inflation now under control, Wall Street is prioritizing employment trends as a key economic indicator.
Bond Market Movements
In the bond market, the yield on the 10-year Treasury edged up to 3.75%, compared to 3.74% late on Friday. The two-year Treasury yield, which is more sensitive to expectations of Federal Reserve policy, dipped slightly to 3.59% from 3.60%.
International Markets
Outside the U.S., markets were mixed. In Europe, economic data revealed weaker-than-expected business activity in the eurozone. Despite this, Germany’s DAX rose 0.7%, while the French CAC 40 remained flat.
In Asia, trading was similarly subdued. Shanghai’s index gained 0.4%, while Hong Kong’s slipped by 0.1%. Notably, China’s central bank cut its 14-day reverse repurchase rate, signaling efforts to stabilize its economy, though it had left key lending rates unchanged last week.
