US stocks rose on Monday with two major indexes clinching record closes as Nvidia (NVDA) led a risk-on rally in the market that permeated through most sectors and even into cryptocurrencies.
The S&P 500 (^GSPC) moved up nearly 0.8% to close at a fresh record after ending above 5,800 for the first time on Friday. The tech-heavy Nasdaq Composite (^IXIC) jumped nearly 0.9%. The Dow Jones Industrial Average (^DJI) rose more than 200 points, or almost 0.5%, to close above the 43,000 level for the first time.
Tech stocks led the day’s gains, with chip giant Nvidia rising nearly 3% to close at a new high above $138 per share. Other semiconductor stocks also surged including chip equipment maker ASML (ASML), Arm Holdings (ARM), and Applied Materials (AMAT).
And the rally broadened even to cryptocurrency, as Bitcoin (BTC-USD) was up more than 5% in the past 24 hours to touch above $65,700 per coin. Meanwhile, Ethereum (ETH-USD) has also rallied, adding nearly 8% on the day.
Earnings are taking center stage as the first full week of third quarter results gets underway. How the season plays out is seen as key to the rally in stocks as the bull market turns 2 years old.
The Dow and S&P 500 entered this week at new records after JPMorgan Chase (JPM) and Wells Fargo (WFC) earnings largely passed Wall Street’s test. Investor focus is staying on big banks with reports from Goldman Sachs (GS), Citi (C), and Bank of America (BAC) on Tuesday’s docket, and Morgan Stanley (MS) due Wednesday.
At the same time, there’s still uncertainty about whether the Federal Reserve will cut interest rates again. A benign jobs report and data showing “sticky” consumer and wholesale inflation are building a case for no rate cut in November, some analysts argue. Retail sales data later in the week will feed into the debate as to whether the economy has held up in the face of Fed policy — the preferred soft landing.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
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Nvidia closes at an all-time high
Nvidia rose nearly 3% to close above $138 per share for the first time ever. This surpassed Nvidia’s prior record close of $135.58 in June.
The stock’s climb began Oct. 2 following the announcement of a massive $6.6 billion funding round for ChatGPT-maker OpenAI. Investors believe much of that funding could be funneled back to Nvidia, as OpenAI’s growing energy demands will require more of its AI chips.
That news was followed up by a swath of bullishness from Wall Street analysts as investors anxiously await the latest quarterly reports from Big Tech companies in the coming weeks.
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Fed’s Waller wants to apply more ‘caution’ when cutting rates
Federal Reserve governor Christopher Waller offered a sense of wariness when talking about the Fed’s path forward for interest rate cuts.
Yahoo Finance’s Jennifer Schonberger reports:
Waller said Monday that the central bank needs to proceed with “more caution” when cutting rates as he absorbs recent data showing a strong job market and hotter-than-expected inflation.
“Data is signaling that the economy may not be slowing as much as desired,” Waller said in a speech at Stanford University in California.
“While we do not want to overreact to this data or look through it, I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting.”
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Why the Fed’s rate cut isn’t stopping inflows to cash on the sidelines
The Federal Reserve held interest rates at multi-decade highs for more than a year. Investors took notice, piling into money market accounts to grab yield that hadn’t been available in more than a decade.
But since the Fed slashed rates by half a percentage point on Sept. 18, the flows into money market accounts haven’t stopped. In fact, through Oct. 10, research provided to Yahoo Finance from Crane Data shows that money market fund assets have increased by about $180 billion since the Fed began cutting rates.
This reveals a truth about the surge of “cash on the sidelines” some have argued could be a reason for the stock market rally to continue. For starters, it could be a nod to the uncertainty some feel about where things will head over the next year.
On Friday, Goldman Sachs chief equity strategist David Kostin wrote in a note to clients that “history does not lend much support to expectations of a cash-to-equity rotation.” Kostin’s research, as seen in our Chart of the Day, shows that since 1984, over the first three, six, and 12 month periods after the Fed begins cutting, flows into money market funds are greater than into equity or bond funds.
Kostin expressed a view we’ve written about in the past, noting that whether or not equities see inflows following rate cuts has more to do with why the Fed is cutting than the cuts themselves.
“Money market funds have historically experienced inflows following rate cuts regardless of the economic backdrop,” Kostin said. “On the other hand, equity funds typically recorded inflows if the US economy avoided a recession and outflows if the US economy entered a recession shortly after the start of the cutting cycle.”
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China growth forecast boosted at Goldman Sachs
Goldman Sachs upgraded its China growth forecast over the weekend, citing recent stimulus measures and new commentary from government officials that showed an openness to spend more aggressively to revive its economy.
The bank raised its full-year China GDP forecast to 4.9% from 4.7% and also upped its 2025 growth prediction to 4.7% from 4.3%. Beijing has previously said it’s aiming for an annual growth target of “around 5%.”
On Saturday, China’s finance ministry hinted at another large stimulus package to support the country’s ailing property sector and suggested more government borrowing, although the ministry stopped short of unveiling the exact size or scale of spending.
Although vague, the comments left the door open for a more aggressive fiscal package, which investors are increasingly betting on as Beijing attempts to pull itself out of a long slump spurred by deflationary pressures from a sluggish property market and weak domestic demand.
Optimism that the government will follow through boosted Chinese stocks on Monday with the Shanghai Composite (000888.SS), a key indicator of the overall performance of the Chinese stock market, rising more than 2%.
Similarly, China’s benchmark CSI 300 (000300.SS) finished the day up just under 2% to recover from last week’s lows. The index is up 25% over the past month on the heels of China unleashing its most aggressive monetary stimulus since the pandemic.
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Bitcoin rally pulls crypto-related stocks higher
Bitcoin (BTC-USD) is up more than 5% in the past 24 hours to touch above $65,700 per coin. The world’s largest cryptocurrency has been surging in recent days and is now up about 8% over the past five trading sessions.
Other cryptocurrency Ethereum (ETH-USD) has also rallied, adding nearly 8%, in the past 24 hours. The risk-on rally in crypto is helping crypto-related US equities catch a bid too.
Shares of Coinbase (COIN) are the leader in the space today, rising more than 8%.
Source: Yahoo Finance -
DJT stock is on a tear. Again.
Trump Media & Technology Group stock (DJT) extended its massive rally on Monday, jumping as much as 9% as investors bet on former President Donald Trump’s improved odds of winning the November election.
Over the weekend, both domestic and overseas betting markets shifted in favor of a Trump victory, with prediction sites like Polymarket, PredictIt, and Kalshi all showing Trump’s presidential chances ahead of those of Democratic nominee and current Vice President Kamala Harris.
Separately, DJT announced the web launch of its Truth+ TV streaming service on Monday. The app is currently available to access on Android devices and will soon be released as a native Apple iOS app.
DJT shares traded at their lowest level since the company’s debut following the expiration of the company’s highly publicized lockup period last month. The stock has also been under pressure as previous polling saw Harris edging slightly ahead of the former president.
Trump’s recent campaign momentum follows an appearance by Elon Musk at his rally in Butler, Pa., earlier this month. It was the same location where the former president survived an assassination attempt in July.
Meanwhile, Harris has recently embarked on a flurry of media appearances in which she was pressed on how she would fund some of her proposals surrounding the economy and immigration.
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Fed’s Kashkari said ‘modest’ rate cuts are ‘likely’ in the coming quarters
Yahoo Finance’s Jennifer Schonberger reports:
Minneapolis Fed president Neel Kashkari said Monday that it’s “likely” the central bank will make “modest” interest rate reductions in the “coming quarters.”
Monetary policy, he said while speaking in Argentina, remains “overall restrictive,” though how restrictive is unclear to him.
The job market remains strong, he added, noting that recent data showed that a rapid weakening in that market doesn’t appear to be “imminent.”
Thus, “It appears likely that further modest reductions in our policy rate will be appropriate in the coming quarters to achieve both sides of our mandate,” Kashkari said.
Read more here.
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Dow, S&P 500 hold near record as tech, utilities leads rally
Technology and Utility stocks rose on Monday, helping lift the Dow Jones Industrial Average (^DJI) up 0.3% and the S&P 500 (^GSPC) up 0.6%. Both major averages were on pace to close at a fresh record high.
The tech-heavy Nasdaq Composite (^IXIC) rose the most among the major averages, up 0.7%.
Utilities and Technology gained on Monday -
SoFi stock soars on $2 billion Fortress deal to expand loan platform
SoFi Technologies (SOFI) stock jumped as much as 9% after the online lender announced a $2 billion agreement with Fortress Investment Group to expand its loan platform business. The segment refers pre-qualified borrowers to loan origination partners and connects lenders with borrowers.
The move reflects SoFi’s strategy of diversifying from its roots in student loan refinancing.
“SoFi’s loan platform business is an important part of our strategy to serve the financial needs of more members and diversify toward less capital-intensive and more fee-based sources of revenue,” said Anthony Noto, CEO of SoFi, in a statement.
Of the Wall Street analysts covering the stock tracked by Bloomberg, only six recommend buying the stock, while 10 have Hold ratings and three have Sell ratings. The stock is up nearly 20% from last year but far from its record intraday high near $27 upon its IPO in 2021.
Analysts see shares falling to $8.91 over the next 12 months, according to Bloomberg data.
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Dow climbs into green territory, holds near record
The Dow Jones Industrial Average (^DJI) clawed its way into green territory by 10:30 a.m ET to hover at new intraday record highs. The blue-chip index had slipped as much as 0.3% shortly after the market open following a record close on Friday.
Meanwhile the S&P 500 (^GSPC) gained 0.6% Monday, on pace for another record close.
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TSMC stock hits record high, rejoins $1 trillion club
Nvidia (NVDA) supplier TSMC (TSM) saw shares of its US-listed equity rise more than 1% in early trading, with the stock notching a new record intraday price of $193.96 per share and rejoining the $1 trillion club.
TSMC shares previously hit an all-time high above $193 each in July after the Taiwanese contract chipmaker reported second quarter earnings. That surge briefly put its market capitalization above $1 trillion before shares pared gains. The stock fell back to earth as investors weighed its high valuation multiples, geopolitical risks, and concerns over AI demand.
TSMC last week revealed third quarter revenue of 759.7 billion New Taiwan dollars ($23.6 billion). That beat the NT$748.3 ($23.3 billion) expected, according to Bloomberg data, as well as the company’s prior guidance of $22.4 billion to $23.2 billion.
Some 23 Wall Street analysts covering the stock tracked by Bloomberg recommend buying TSMC shares, while only one analyst has a Hold rating. Analysts see shares rising to $216.59 each over the next 12 months, according to Bloomberg data.
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Boeing slips more than 2% as plane maker plans cuts 10% of workforce, strike enters 5th week,
Boeing (BA) shares slipped more than 2% as investors questioned the crisis-hit plane maker’s future amid job cuts and a strike that is now in its fifth week.
On Friday, the company said it will cut 17,000 jobs, or about 10% of its workforce.
“Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term,” CEO Kelly Ortberg said in a message to employees posted on Boeing’s website on Friday.
An ongoing strike by Boeing’s biggest union, the International Association of Machinists and Aerospace Workers (IAM), is proving costly on several fronts for the company.
S&P Global put the cost estimate of the strike that started on Sept. 1 at roughly $1 billion per month. Last week, talks between Boeing and IAM broke down, with the company withdrawing its contract proposal.
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Nvidia climbs 2%, hovers near record
Nvidia (NVDA) stock jumped more than 2% at the open on Monday, surpassing its June record high close of $135.58.
The stock was a couple of dollars away from its all-time intraday high just past $140.76.
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S&P 500 eyes fresh record, Dow slips as focus shifts to earnings
The major averages opened mixed on Monday as investors turned their focus to upcoming big bank earnings and other quarterly results from major companies.
The S&P 500 (^GSPC) moved up roughly 0.3% to eye a new record high. On Friday, the broader index ended above 5,800 for the first time.
The tech-heavy Nasdaq Composite (^IXIC) was up 0.5% soon after the bell on Monday, while the Dow Jones Industrial Average (^DJI) slipped 0.2% from its Friday record close.
Earnings season continues in full swing this week, with Citi (C), United Airlines (UAL), AI chip equipment maker ASML (ASML), Netflix (NFLX), and American Express (AXP) among those expected to report.
Oil futures dropped more than 2% as OPEC cut its demand forecast for 2024 and 2025. Traders also reacted to a lack of detail from China’s Finance Minister over the weekend on any large new stimulus spending.
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Nvidia stock eyes record high and top spot as most valuable company ahead of Apple
Nvidia (NVDA) stock rose 1% in premarket trading to $136.22, putting the chipmaking giant on track to surpass its previous record closing price of $135.58 posted in June.
The AI chipmaker’s shares have made substantial gains in October following a massive $6.6 billion funding round for ChatGPT-maker OpenAI, much of which will be funneled back to Nvidia. AI leaders, including Nvidia CEO Jensen Huang, have cited furious demand for the company’s latest Blackwell chips. Its stock is up 8% over the past week.
Nvidia’s gains put it on track to once again claim the rank of No. 1 most valuable company in the world in terms of market capitalization. It currently holds the No. 2 position behind Apple (AAPL). The chipmaker’s market cap stood at $3.3 trillion Monday, while Apple’s was $3.46 trillion. Apple, Microsoft (MSFT), and Nvidia have traded places as the top three companies over the past year.
Nvidia is set to report earnings on Nov. 19. Wall Street analysts expect it to report revenue of $33 billion, up 82% from the prior year, according to Bloomberg consensus estimates. Some 90% of those covering the stock and tracked by Bloomberg recommend buying Nvidia shares.
Read More: Dow, S&P 500 clinch fresh highs as Nvidia surges to record