The Dow Jones gained as much as 500 points, albeit cooling off from the highs of the day, but still managed to post a record close. The S&P 500 gained 1.6%, while the Nasdaq jumped over 3% on Monday, notching its best single-day move since March 31.
Nasdaq rally was enabled by the chip stocks, who also propelled the Philadelphia Semiconductor Index to a record high. Falling oil prices further added to the bullish sentiment with both Brent and the US crude variants declining by nearly 5% each.
MoU Signed
US President Donald Trump and Vice President JD Vance have signed an electronic copy of the MoU with Iran, according to a senior US official. In a meeting with French President Macron, Trump said that the Strait is already partially open and that it will be open fully by Friday.
“Volatility may persist in the near term as markets assess the implementation and durability of the deal, but we maintain our view that resilient growth and robust earnings should continue to drive stocks higher,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.
US stocks could get an additional boost from a rotation into economically-sensitive sectors that have lagged during the war, according to Morgan Stanley strategists led by Michael Wilson. JPMorgan Chase & Co.’s Mislav Matejka said the move into cyclicals is “on track to remain a winning strategy” through year-end, provided geopolitical tensions ease and earnings and inflation remain stable.
SpaceX Continues To Soar
Shares of SpaceX soared another 20% in their first full day of trading as a public company, having ended their trading debut on Friday with gains of 19%.
With this, the Elon Musk-led company’s market capitalization is well over $2.5 trillion and is just within touching distance of surpassing Amazon in market value terms.
Market watchers have warned of more volatility in the share price once retail demand wanes and the shares held in a lock-up come into the market.
Fed Meet Begins Today
The two-day meeting of the Federal Open Markets Committee (FOMC) begins today, the first under new chair Kevin Warsh, who has to juggle a balance between combating inflation and expectations of the White House.
Asset manager PGIM has warned that the Fed could raise rates thrice this year, before reversing all of those in 2027 and then cutting once more in 2028 to bring rates back to the “neutral” level.
Bond market futures are still pricing in a 70% probability of the Fed raising rates at least once by December.
(With Inputs From Agencies)
