TLDR
- The S&P 500 rose 1% on Monday, marking its 8th straight day of gains
- All major sectors in the S&P 500 saw increases
- The Nasdaq rose 1.4% and the Dow Jones Industrial Average climbed 0.6%
- Investors are awaiting Federal Reserve Chair Jerome Powell’s speech at Jackson Hole later this week
- The S&P 500 is now just 1% off its record high set in July
The U.S. stock market continued its upward momentum on Monday, with major indexes posting gains for the eighth consecutive trading day.
The S&P 500, a key benchmark for the overall market, rose 1% to close at 5,608.25 points. This marks the index’s longest winning streak since November and brings it within 1% of its all-time high reached in July.
The tech-heavy Nasdaq Composite index saw even stronger gains, climbing 1.4% to end the day at 17,876.77. Meanwhile, the Dow Jones Industrial Average added 236.77 points, or 0.6%, closing at 40,896.53.
All major sectors within the S&P 500 contributed to Monday’s rally, indicating a broad-based advance across the market. Technology shares led the gains, but an equal-weighted version of the index – which gives the same importance to smaller companies as it does to tech giants – also hit a record high. This suggests the market’s recent strength is not limited to just a few large tech companies.
Smaller companies also participated in the day’s gains, with the Russell 2000 index of small-cap stocks rising 1.2% to 2,167.50.
The recent stock market rally has added over $3 trillion in value since the August lows, according to some estimates. This surge comes as investors increasingly bet that the Federal Reserve may be nearing the end of its interest rate hiking cycle and could potentially begin cutting rates in the near future.
Market participants are now turning their attention to the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, scheduled for later this week. Fed Chair Jerome Powell’s speech on Friday is expected to be a key event, potentially offering insights into the central bank’s future policy direction.
“Investors ‘climbed a wall of worry’ as the stock-market relief rally gained momentum,” said Craig Johnson at Piper Sandler. “Equities will likely consolidate ahead of Fed commentary at Jackson Hole this week.”
The market’s recent gains have come despite some concerns about economic growth and inflation. However, recent economic data and corporate earnings reports have helped boost investor confidence. Many market participants now expect the Fed to cut interest rates at its September meeting, although the exact timing and pace of any rate cuts remain subjects of debate.
In corporate news, Advanced Micro Devices (AMD) saw its stock price rise 4.5% after announcing plans to acquire ZT Systems, a data-center equipment designer, for nearly $5 billion. This move is seen as part of AMD’s strategy to expand its presence in the growing cloud computing and artificial intelligence markets.
On the other hand, shares of Estée Lauder fell 2.2% after the beauty company forecast lower annual sales, highlighting ongoing challenges in some segments of the consumer goods sector.
Treasury yields edged lower on Monday, with the yield on the benchmark 10-year U.S. Treasury note settling at 3.868%, down from 3.891% on Friday. This decline in yields may reflect growing expectations of future interest rate cuts.
