On Monday, the major indexes on Wall Street climbed to one-week peaks, driven by positive sentiment surrounding AI that lifted semiconductor shares, alongside a report indicating that the incoming Trump administration might take a less confrontational approach to tariffs than had been expected.
By 12:03 p.m. ET, the Dow Jones Industrial Average was up by 353.08 points, or 0.83%, reaching 43,085.21. The S&P 500 increased by 74.43 points, or 1.25%, to hit 6,016.90, and the Nasdaq Composite rose by 343.99 points, or 1.75%, to 19,965.67.
Shares of automakers saw gains, with Ford increasing by 1.6% and General Motors surging by 4% following a report that stated President-elect Donald Trump’s incoming administration was focusing on establishing universal tariffs, but only for specific sectors considered crucial for national or economic security. Trump later denied this report.
Auto manufacturers are regarded as particularly at risk from tariffs targeting U.S. trade partners, due to their extensive supply chains.
As Trump’s inauguration on Jan. 20 approaches, investors are eager for insights into his policies, which are generally perceived as favorable for American corporations and the economy.
The Russell 2000 index, which reflects small-cap companies focused on domestic markets, rose by 0.9%.
“History shows us that Trump is unpredictable. He enjoys stirring the market, yet the final results are often not as intense as his initial declarations,” noted ING analysts led by Chris Turner.
“Nonetheless, officials and companies should remain cautious. True clarity will only emerge upon completion.”
Eight of the 11 sectors in the S&P 500 saw advances, with technology stocks leading the way with a 2% rise.
Semiconductor companies benefited from Microsoft’s announcement of an $80 billion investment into AI-driven data centers, in addition to Foxconn’s revenue that exceeded forecasts for the fourth quarter.
Nvidia increased by 4.5%, Advanced Micro Devices rose by 3.7%, and Micron Technology surged by 11.6%. The Philadelphia SE Semiconductor index experienced a 3.7% increase, reaching a two-month high.
U.S. equities bounced back sharply on Friday following a series of declines throughout December and the beginning of the new year, prompting traders to retreat amid concerns regarding elevated valuations, rising Treasury yields, and low liquidity after a strong performance in 2024.
As the week unfolds with a wealth of economic data and speeches from officials at the U.S. Federal Reserve, investors will be on the lookout for indications regarding the speed of monetary policy adjustments this year. A significant monthly employment report will be in focus later in the week.
While Trump’s initiatives could enhance corporate earnings and invigorate the economy, they also pose the danger of increasing inflationary pressures. Fed Governor Lisa Cook recently warned that inflationary risks persist as we enter the new year.
Citigroup shares rose by 3.8% following a favorable rating from Barclays. An index tracking banking stocks increased by 1.7%. Fed Vice Chair for Supervision Michael Barr, known for advocating stringent regulations on large U.S. banks, announced his resignation.
Markets will be closed on Thursday, Jan. 9, in honor of a national day of mourning for the late former President Jimmy Carter.
On the NYSE, advancing issues outnumbered declining ones by a ratio of 1.84-to-1, while on the Nasdaq, the ratio was 1.92-to-1 in favor of advances.
The S&P 500 recorded eight new 52-week highs and five new lows, while the Nasdaq Composite marked 86 new highs and 21 new lows.
