On Monday, U.S. stocks closed higher, driven by a decrease in U.S. Treasury yields that bolstered the performance of large cap stocks.
The Dow Jones Industrial Average increased by 216.90 points, or 0.58 percent, reaching 37,683.01. The S&P 500 rose by 66.30 points, or 1.41 percent, to 4,763.54. The Nasdaq Composite Index also went up by 319.70 points, or 2.20 percent, to 14,843.77.
Of the 11 primary S&P 500 sectors, ten ended in the positive, with technology and consumer discretionary leading the gainers at 2.75 percent and 1.77 percent, respectively. Only energy experienced a decline of 1.16 percent.
Major companies like Amazon and Alphabet saw about 2 percent increases with U.S. Treasury yields dropping in anticipation of upcoming inflation data and new government bonds. The 10-year U.S. Treasury yield declined to a session low of 3.966 percent.
Apple also saw a 2 percent rise after the announcement that its Vision Pro mixed-reality device will go on sale in the United States from Feb. 2.
Chipmakers like Nvidia and Advanced Micro Devices experienced surges of over 5 percent each. The Philadelphia SE Semiconductor Index also rose more than 3 percent, recovering from a 5.8 percent decline the previous week, which was the biggest weekly percentage drop since October 2022.
UBS Group’s wealth-management strategists have increased their 2024 price target for the S&P 500, in line with expectations on Wall Street that stocks will reach new highs by year-end.
“We now have more confidence in our base case of an economic soft landing and we see the Fed cutting rates four times this year, likely starting in May. We have raised our December S&P 500 target to 5,000, providing 6.4 percent upside from Friday’s closing price of 4,697,” said Mark Haefele, chief investment officer at UBS Global Wealth Management on Monday.
The Dow Jones Industrial Average faced pressure in the morning session, with Boeing shares dropping 8.03 percent following the joint decision by the company and U.S. regulators to authorize inspections of grounded airplanes. This came after an incident in which a panel detached from an Alaska Airlines-operated 737 MAX 9 during a flight, leading to an emergency landing over the weekend.
Atlanta Fed President Raphael Bostic stated on Monday that the central bank’s goals of lowering inflation and maintaining low unemployment are not in conflict. Traders now believe there’s a 69.5 percent chance of at least a 25-basis point rate cut in March, according to the CME Group’s FedWatch Tool.
