S&P 500, Dow Notch Record Closing Highs as Crude Slumps
- Major Indexes Set Record Highs: The S&P 500 and Dow Jones hit record closing highs on Monday, driven by strong tech performance.
- Crude Prices Decline: Oil prices dropped as concerns over China’s economy weighed on global demand outlook.
- No Major Earnings or Economic Data: The U.S. bond market was closed for Columbus Day, leaving investors focused on corporate earnings later in the week.
- China Economic Worries: Weak Chinese export growth and insufficient stimulus measures sparked investor caution.
- Upcoming Earnings to Watch: Big banks and tech companies like Bank of America, Netflix, and Citigroup are set to report later in the week.
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U.S. Stock Markets Soar Amid Lack of Major Data
U.S. stocks finished higher Monday, with the S&P 500 and Dow Jones Industrial Average reaching record closing highs. The session was marked by light trading due to the Columbus Day holiday, with no major earnings or economic data releases. Tech-heavy Nasdaq also gained, buoyed by strength in megacap tech names like Microsoft and Amazon.
The Dow Jones rose 203.14 points, or 0.47%, to 43,067.00, while the S&P 500 climbed 0.78% to 5,860.20. The Nasdaq Composite added 0.87%, rising to 18,502.69. The tech sector was the star performer, lifting the overall market as investors looked past economic uncertainties from China.
Light Trading Amid Market Closures Peter Tuz, president of Chase Investment Counsel, pointed out the unique nature of the day due to the absence of key data and the closure of the U.S. bond market. He noted that “momentum is on the upside until something changes,” indicating that investors remain cautiously optimistic ahead of earnings later in the week.
China's Economic Woes Weigh on Markets
While U.S. stocks rose, concerns over China’s economic health lingered. A lack of detailed stimulus measures from China’s central authorities, combined with disappointing export growth data, fueled uncertainty about global demand for commodities.
China’s failure to provide significant new stimulus measures has cast doubts on the country’s ability to boost economic activity. This was compounded by Beijing’s pledge to “significantly increase” debt without specifying any actionable plans.
Sam Stovall, chief investment strategist at CFRA Research, emphasized that China’s struggles pose a challenge to global growth, particularly in the commodities sector. “Oil prices are another indication of lack of confidence that China will be able to pull itself up,” Stovall said.
Crude Oil Prices Decline
Oil prices took a hit on Monday, with U.S. crude down 2.29% to $73.83 per barrel and Brent crude declining by 2.00% to $77.46 per barrel. This dip came as the Organization of the Petroleum Exporting Countries (OPEC) cut its oil demand growth outlook for 2024 and 2025. Adding to the downward pressure were falling Chinese oil imports, which declined for the fifth consecutive month.
Upcoming Earnings and Data Releases
The focus will shift to high-profile earnings later in the week, with Bank of America, Citigroup, Goldman Sachs, and Netflix all set to report. Additionally, economic data on retail sales, industrial production, and housing starts will give investors more insight into the state of the U.S. economy.
Global Markets Also Gain European markets also edged higher on Monday, with the STOXX 600 index rising 0.53%. Investors largely brushed off China’s struggles and focused on earnings season and the upcoming European Central Bank (ECB) policy meeting. In Asia, stocks were mixed, with Japan’s Nikkei gaining 0.57%, while broader Asia-Pacific shares were largely unchanged.
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