US stocks surged on Monday, boosted by lower oil prices and gains in technology shares after last week's volatility. The Dow Jones Industrial Average rose 1,001 points and moved back above its Election Day close. Investors now turn to inflation data and AI earnings.
The Dow Jones Industrial Average popped 1,001 points, or 2%, supported by gains in Goldman Sachs and Caterpillar. The S&P 500 rose 2.4%, while the Nasdaq Composite gained 2.7%.
With the rally, the Dow is now above its Election Day close. The S&P 500 and the Nasdaq still remain slightly below that level.
Oil slides while tech shares rebound
Oil prices fell, which lifted investor sentiment. U.S. West Texas Intermediate futures dropped 3% to around $87 per barrel, and Brent slid 4% to about $94.
Tech shares rebounded as well. Amazon gained 5%, Tesla and Alphabet climbed more than 3%, and Microsoft added 2%. Broadcom and Advanced Micro Devices each popped 5%, while the iShares Semiconductor ETF, which dropped around 13% last week, rose more than 6%.
Nvidia moved against the trend. Its board opened an investigation into CEO Jensen Huang's relationship with a businesswoman whom U.S. intelligence agencies say is a Chinese spy, and the shares were last down 6%.
Strategists see lingering overhangs
Jay Hatfield, CEO at Infrastructure Capital Advisors, called the recent chip sell-off overdone but also partially correct, pointing to a policy overhang from the Democrats. For the broader market, Hatfield said: "it's not like the coast is clear" He anticipates the S&P 500 will be rangebound through the end of the year.
Wolfe Research's Chris Senyek wrote that markets are likely to remain very news flow driven. Currently, the S&P 500 is trading just above its 200-day moving average.
This week, CoreWeave, Cisco and Applied Materials are on deck with AI-related earnings. Investors will also watch for the consumer price index on Tuesday. The producer price index on Friday is the other release they will watch for clues on the Fed's next move on interest rates.
Source: CNBC
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