The Dow Jones surged nearly 700 points to a record closing high. The S&P 500 gained 1.5% and is now within 20 points of its own record high. The Nasdaq Composite also surged 1.8%, as did the Nasdaq 100.
Chip and AI stocks led the upmove yet again. Amazon added another 4.5% to last Friday’s 15% surge, which took the stock’s market capitalisation past the mark of $3 trillion. A gauge of the magnificent seven stocks had its best day since March this year. Shares of peers Alphabet and Microsoft gained 5% each, while Nvidia also saw a 3% jump overnight.
Here are the factors that contributed to the upmove on Monday
US President Donald Trump continued to insist that the US and Iran and holding talks to resolve the ongoing conflict and reopen the Strait of Hormuz, even as Iran keeps denying that there are any talks taking place with the US.
What Iran did confirm though, was progress in their talks with Oman to get more ships moving through the Strait of Hormuz and to form a new “temporary route” currently.
The news sent oil prices down sharply with both Brent and WTI crude falling close to 5% each. WTI fell below $80 a barrel, while Brent fell below $85, having touched $100 a barrel a couple of weeks earlier.
Positive Macro Data
The US reported strong manufacturing data even as the economy continues to face uncertainties regarding the war.
July’s manufacturing PMI data came in at 55.6, which is the fastest pace of growth since May 2022. The figure is higher than June’s 53.3 and also higher than estimates of 54.
Manufacturing PMI in the US has now remained above the mark of 50 for seven months in a row. A figure above 50 indicates “expansion.”
Bond Yields Cool
As oil prices fell, bond yields saw a small but a cool-off nonetheless. The 10-year bond yield is now at 4.67%, compared to last Friday’s high of 4.74%.
The US Dollar index continues to hover around the mark of 100.
What To Watch Today
Macro data and results start to pick-up pace from today’s session on Wall Street with the JOLTS job openings, trade balances and factory orders data set to be reported today.
Along with the Macro Data, results from SpaceX will also be reported during the course of the day. The newly listed Elon Musk-owned enterprise, the biggest IPO in history till date, is now trading below its issue price of $135 apiece, even though it managed a 6% pop overnight.
Besides SpaceX, AMD, Merck & Co., Amgen and many others will also be reporting results today.
