On Monday, stocks initially surged at the start of the trading session but retreated as the day progressed. While the major indices pulled back from their session highs, the Nasdaq and S&P 500 managed to close on a positive note.
The Nasdaq advanced by 243.30 points, or 1.2%, reaching 19,864.90, while the S&P 500 rose 32.91 points, or 0.6%, to settle at 5,975.38. Conversely, the Dow saw a slight decline, decreasing by 25.57 points, or 0.1%, to close at 42,706.56.
The initial surge on Wall Street was largely driven by the ongoing strength in technology stocks. This came after Foxconn, a major contract electronics manufacturer, reported record fourth-quarter revenue, attributed to robust demand for AI servers.
Foxconn partners with prominent AI company Nvidia (NVDA), whose shares climbed 3.4% for the day. Chipmaker Micron (MU) also experienced significant gains, soaring by 10.5%.
Additionally, early market enthusiasm was fueled by a Washington Post article hinting that President-elect Donald Trump might reconsider his aggressive tariff proposals.
While Trump had previously advocated for "universal" tariffs of up to 10 or 20% on all imports into the U.S., the article suggested that his team is considering tariffs specifically targeting "critical imports" from other countries.
However, the buying momentum faded after Trump dismissed the report as "fake news."
**Sector Overview**
Despite the broader market's retreat, airline stocks exhibited notable strength, leading to a 3.7% rise in the NYSE Arca Airline Index. American Airlines (AAL) gained significantly after TD Cowen upgraded its stock rating from Hold to Buy.
Strong performances were also seen in the computer hardware and semiconductor sectors. The NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index surged by 3.6% and 2.8%, respectively.
Industries such as steel and networking showed strength as well, whereas interest-rate-sensitive commercial real estate and utilities stocks experienced considerable weakness.
**International Markets**
In the Asia-Pacific region, stock markets showed a mixed performance on Monday. Japan's Nikkei 225 Index fell by 1.5%, while South Korea's Kospi rose sharply by 1.9%.
European markets mostly posted gains. France's CAC 40 Index surged by 2.2%, Germany's DAX Index increased by 1.6%, and the U.K.'s FTSE 100 Index grew by 0.3%.
In the bond market, treasuries recovered from their lowest points but finished slightly lower. Consequently, the yield on the key ten-year note, which inversely correlates with its price, increased by 2.2 basis points to 4.618%, following an eight-month intraday peak of 4.644%.
**Looking Ahead**
On Tuesday, trading activity may be influenced by new reports on the U.S. trade deficit, service sector performance, and job openings.
The material has been provided by InstaForex Company -
www.instaforex.com
