Wall Street kicked off the week with a positive momentum, fueled by optimism surrounding the Federal Reserve’s upcoming Jackson Hole Symposium. Traders are eagerly anticipating reassuring signals from policymakers regarding the possibility of impending interest rate cuts, following the recent easing of inflation. This positive sentiment is reflected in the gains witnessed by both the S&P 500 and the Nasdaq 100, which are on track for their eighth consecutive trading session in the green.
All eleven sectors within the S&P 500 recorded gains, signifying a widespread bullish sentiment among investors. With the corporate earnings season nearing its end, nearly 95% of S&P 500 companies have already released their financial results. According to FactSet data, a significant 79% of these companies have exceeded earnings per share (EPS) expectations, while 60% have reported better-than-anticipated revenue. The blended year-over-year earnings growth rate for the S&P 500 currently stands at 10.9%, marking the strongest growth since the fourth quarter of 2021.
Growing confidence that the Federal Reserve will initiate its monetary easing cycle in September has led to a decline in the U.S. dollar index, pushing it below the 102 level, a threshold last seen on January 2, 2024. The weakening of the U.S. dollar has triggered a rally in emerging-market stocks, with the iShares MSCI Emerging Markets Index Fund (EEM) experiencing a 0.9% rise on Monday. This marks its ninth positive closing in the past ten sessions. U.S. small caps have also witnessed a rebound, with the iShares Russell 2000 ETF (IWM) climbing 0.7%, surpassing its 50-day moving average and slightly outperforming large-cap indices.
In the commodities market, gold maintained its stability at $2,500 per ounce, following record highs reached on Friday, its best-performing session since December. Oil prices, however, experienced a 2.4% decline as the absence of retaliation from Iran against Israel has reduced the risk premium in crude prices. Bitcoin (BTC/USD) edged 0.5% higher after a 1.8% drop on Sunday.
Monday’s Performance in Major US Averages and ETFs:
| Index | 1-day %chg |
|———————-|————|
| Russell 2000 | 0.8% |
| S&P 500 | 0.5% |
| Dow Jones | 0.4% |
| Nasdaq 100 | 0.3% |
According to Benzinga Pro data:
* The SPDR S&P 500 ETF Trust (SPY) rose 0.5% to $557.03.
* The SPDR Dow Jones Industrial Average (DIA) also gained 0.5% to $408.88.
* The tech-heavy Invesco QQQ Trust Series (QQQ) edged up 0.4% to $476.92.
* The iShares Russell 2000 ETF rallied 0.8% to $214.17.
* The Energy Select Sector SPDR Fund (XLE) and The Consumer Discretionary Select Sector SPDR Fund (XLY) outperformed, both gaining 1%.
* The Consumer Staples Select Sector SPDR Fund (XLP) lagged, rising by 0.4%.
Monday’s Stock Movers:
*
McDonald’s Corp. (MCD)
rallied 3.3% after Evercore ISI adjusted the stock price target from $300 to $320, maintaining an Outperform rating.*
Advanced Micro Devices Inc. (AMD)
rose 2.5% following the company’s announcement of the acquisition of ZT System, a supplier of artificial intelligence infrastructure, in a cash-and-stock deal valued at $4.9 billion.*
General Motors Company (GM)
gained 0.8% after laying off over 1,000 salaried employees globally in its software and services division as part of a review aimed at streamlining operations.*
Amer Sports Inc. (AS)
surged over 8% ahead of its quarterly earnings report, scheduled in the premarket on Tuesday.Stocks reacting to company earnings included The Estee Lauder Companies Inc. (EL) and ZIM Integrated Shipping Services Ltd. (ZIM). Palo Alto Networks Inc. (PANW) and Fabrinet (FN) will publish their results after the close.
