Stocks saw notable gains on Monday, continuing their upward trajectory from the previous session, buoyed by growing expectations that the Federal Reserve might cut interest rates. The Dow Jones Industrial Average rose by 176.59 points, a 0.46% increase, closing at 38,852.27. This marked the fourth consecutive session of gains for the index. Similarly, the S&P 500 advanced by 1.03% to end at 5,180.74, while the Nasdaq Composite increased by 1.19% to close at 16,349.25.
A key factor contributing to the day’s positive momentum was the news that Hamas had accepted an Egyptian-Qatari cease-fire proposal to end the conflict with Israel, which provided an additional boost to the markets in the early afternoon.
The backdrop to Monday’s gains includes recent labor market data that suggested a cooling economy, which could alleviate pressure on the Fed to raise rates. Last Friday’s nonfarm payrolls report showed fewer jobs added in April than expected, coupled with a rise in unemployment.
Market sentiment was further lifted following comments from Fed Chair Jerome Powell last week, where he indicated that the central bank’s next move would not include a rate hike. This reassurance from Powell led to a “sigh of relief” among investors, according to Sam Stovall, chief investment strategist at CFRA.
Looking ahead, investors remain focused on key earnings reports due this week, including from major companies like Disney on Tuesday and Uber on Wednesday. Additionally, over the weekend, Berkshire Hathaway reported a nearly 40% increase in year-over-year operating earnings for the first quarter, adding more positive sentiment around corporate financial health.
In the stock-specific news, Micron Technology saw a significant jump, gaining 4.7% after an analyst upgrade at Baird, who cited “meaningful opportunities ahead” for the chipmaker. Meanwhile, American Airlines and Super Micro Computer were among the top performers in the S&P 500, both posting gains around 5.8% and 6.1%, respectively.