Market Updates

The S&P 500 index closed Monday slightly up at +0.44%. The Dow Jones Industrials recorded a modest gain of +0.14%, while the Nasdaq 100 rose by +0.55%. In the futures market, December e-mini S&P rose by +0.40%, and December e-mini Nasdaq saw an increase of +0.50%.

The stock market continued its upward trend on Monday, reaching new highs for the S&P 500, Dow Jones, and NASDAQ 100. Semiconductors and AI-related stocks played a significant role in boosting the overall market. However, rising bond yields capped some of the gains, as hawkish comments from the Fed pushed the 10-year Treasury yield to a two-week high of 4.15%.

The ongoing bull run has led many to believe that the Fed might continue to lower interest rates, especially given signs of a weakening labor market contributing to inflation pressures. Interestingly, gold prices soared over 1% on Monday, hitting record levels, as global central banks adopted a more dovish stance amid geopolitical risks and trade tensions.

Minor economic indicators released Monday also supported the stock market. The Chicago Fed National Activity Index improved to a five-month high of -0.15 in August, which was better than analysts had anticipated.

Today’s comments from the Fed leaned hawkish and could negatively impact stocks. St. Louis Fed President Albert Musalem mentioned limited room for additional interest rate cuts due to rising inflation. Meanwhile, Atlanta’s Fed President Rafael Bostic pointed out that he sees little incentive to lower rates further, as inflation is not likely to return to the 2% target until 2028.

Bitcoin dropped over 2% on Monday, reaching a 1.5-week low, largely due to liquidation pressures, with more than 407,000 traders settling their positions in the past day.

Corporate earnings expectations are giving the stock market some bullish momentum. Over 22% of S&P 500 companies have provided forecasts for third-quarter revenues that are anticipated to exceed analyst predictions. Additionally, S&P companies are expected to see revenue growth of 6.9% this quarter, up from 6.7% reported at the end of May.

This week, attention will be on trade and tariff news. The S&P manufacturing PMI for September is predicted to fall from -0.8 to 52.2. Federal Reserve Chairman Powell is also scheduled to discuss the economic outlook at an event soon. On Wednesday, housing data is expected to show new home sales dropping to 650,000. Initial unemployment claims are projected to increase slightly, and August’s core capital goods are expected to decline by 0.1%. Additionally, Q2 GDP is estimated to be reaffirmed at 3.3% quarterly, while existing home sales for August are expected to reach 3.96 million, with a slight decline month-over-month.

The market currently anticipates a 90% chance of a 25 basis point rate cut during the FOMC meeting on October 28-29.

International markets were mixed on Monday, with the Euro Stoxx 50 down 0.30%, while China’s Shanghai Composite saw a slight increase of 0.22%, and Japan’s Nikkei 225 rose by 0.99%.

Interest Rates

The December 10-year T-note closed down by 1.5 ticks on Monday. The 10-year T-note yield rose by 1.4 basis points to reach 4.141%. Prices for T-notes retreated from earlier gains, dropping to two-week lows, as yields rose to 4.149% due to hawkish comments from several Federal Reserve officials. The demand for T-notes decreased with the S&P 500 hitting new record highs. Additionally, supply pressures loom with a $21.1 billion T-note auction scheduled this week, alongside a $69 billion two-year T-note auction.

European government bond yields varied on Monday. Germany’s 10-year yield increased to 2.762%, marking a 2.5-week high, while the UK’s 10-year yield fell, ending at 4.712% after peaking earlier.

Market expectations indicate a 2% chance of a 25 basis point rate cut by the ECB in their meeting on October 30.

Stock Movers

Applied Materials led the charge in semiconductor and AI-infrastructure stocks, jumping by over 5% after an upgrade from Morgan Stanley, which set a price target of $209. Other tech stocks, including LAM Research and Seagate Technology, also performed well, while Nvidia closed up 3%. Teradyne saw impressive growth, soaring over 12% after a target price increase from Susquehanna Financial.

Apple gained more than 4% following a boost in target price from Wedbush, leading gains for the Dow.

In an impressive turn, MBX Biosciences surged over 101% after a promising Phase 2 study announcement. Similarly, Metsera spiked over 61% when Pfizer agreed to acquire it for about $4.9 billion.

Conversely, shares of Kemb dropped over 7% after reports linked its Tylenol drug to autism. Keurig Dr Pepper fell over 4% following a downgrade, and Amer Sports dropped over 4% in light of an investigation into its environmental practices.

United Airlines saw a decline of over 1% as new data indicated a drop in planned bookings for transatlantic travel this fall.

Upcoming Revenue Reports

AAR Corp, AutoZone, Micron Technology, Millerknoll, and Worthington Enterprises are slated to report their earnings on September 23, 2025.