new york –
U.S. stocks rose on Monday as gains in big tech stocks offset declines in oil and gas stocks after the oil price plunge.
The Standard & Poor’s 500 rose 0.3%, the Dow Jones Industrial Average rose 0.6% and the Nasdaq Composite rose 0.3%, nearing its all-time high set in July.
Several big tech stocks are leading the way, with five of the giant companies known as the Magnificent Seven scheduled to report their latest earnings this week. These high-flying stocks have been at the forefront of Wall Street for years, and have grown so large that their movements alone can change the S&P 500.
Alphabet, Metaplatform, Microsoft, Apple and Amazon are under pressure to deliver even stronger growth after losing steam over the summer over concerns that their stock prices were rising too quickly relative to profits.
Tesla, another member of the Magnificent Seven, reported profits that beat analysts’ expectations last week, surging to one of the best days in the company’s history.
Monday’s rally in Big Tech stocks helped offset declines in oil and gas industry stocks, which were hurt by falling oil prices. Exxon Mobil, down 0.6%, and ConocoPhillips, down 1.5%, were the biggest weights in the S&P 500 index.
Benchmark US crude oil fell 6.1% per barrel, and international standard Brent crude oil fell 5.9%. It was their first trading day since Israel struck Iranian military targets on Saturday in retaliation for an earlier barrage of ballistic missiles. Israel’s attacks were more subdued than some investors had feared, raising hopes that the worst-case scenario could be avoided.
Besides the violence causing human suffering, financial markets are concerned that escalating wars in the Middle East could cut off the flow of oil from Iran, a major oil producer. Those concerns drove Brent crude prices to nearly $81 a barrel in early October, despite signs that there was enough oil available in the global economy. It has since fallen below $72.
Financial markets are also dealing with the volatility inherent in the US presidential election, with voting days looming on both Tuesdays. Historically, markets have been volatile leading up to elections, then settling down no matter which party wins.
This trend affects both stock and bond markets. In the bond market, U.S. Treasury yields were trending higher, adding to gains on strong gains so far this month.
The yield on the 10-year U.S. Treasury rose to 4.29% from 4.24% late Friday. This is significantly higher than the 3.70% level around the beginning of October.
Yields rose as reports continued to show that the U.S. economy remained stronger than expected. That’s good news for Wall Street, as it raises hopes that the economy can emerge from the worst inflation in generations without suffering the painful recession that many feared was inevitable.
But at the same time, traders are chipping away at their expectations for how much the Fed will cut interest rates, as it is as focused on keeping the economy strong as it is on lowering inflation. It’s out of necessity. U.S. Treasury yields have also regained some of their earlier declines as bets about how much the Fed will ultimately cut rates fade.
That means Friday’s U.S. jobs report could be an even bigger market main event than the big tech companies’ earnings reports. Investors would like to see further evidence of solid employment to maintain hopes for a perfect landing for the economy.
Such data has replaced Wall Street’s most important monthly inflation report, a trend that appears to be slowing as inflation appears to be heading toward the Fed’s 2% target. There is.
Yields also rose as investors see former President Trump’s re-election chances improving. Economists say a Trump victory could push up inflation in the long run, and worsening inflation could prompt the Fed to raise interest rates.
Trump Media and Technology Group, which tends to focus more on Mr. Trump’s re-election chances than its own profit outlook, soared 18.9% to $46.27 on Monday. The parent company of President Trump’s platform Truth Social has rallied since hitting a bottom of about $12 in late September, but remains well below its perch above $60 in March. .
Robinhood Markets rose 3.3% after announcing it would allow some customers to trade contracts based on whether they think Trump or Vice President Kamala Harris will win the 2024 election.
Delta Air Lines was another winner, rising 3.1% after the cybersecurity firm sued CrowdStrike, claiming it cut corners and caused a global technology outage that led to thousands of flight cancellations in July. .
In overseas stock markets, Japan’s Nikkei stock average rose 1.8% as the value of the yen fell after Prime Minister Shigeru Ishiba’s ruling coalition lost its majority in the 465-seat lower house in Sunday’s parliamentary elections.
Stock indexes generally rose in most of the rest of Asia and Europe.
Cho writes for The Associated Press. Associated Press writers Yuri Kageyama and Matt Ott contributed to this report.
