Wall Street’s main indexes experienced gains on Monday, driven by increases in Amazon.com shares and the energy sector. This was accompanied by a rise in Treasury yields and anticipation of economic data and Federal Reserve policymakers’ remarks later in the week regarding interest rates.
Investors are grappling with the recent surge in benchmark Treasury yields, which reached 16-year highs after the Federal Reserve provided a hawkish longer-term rate outlook. The S&P 500 rebounded on Monday after experiencing its largest weekly drop since March.
Chuck Carlson, CEO of Horizon Investment Services, noted the ongoing “tug of war” between investors becoming more concerned about prolonged high interest rates and those who believe the correction has already occurred and the market can build from current levels.
The Dow Jones Industrial Average rose by 0.13%, the S&P 500 gained 0.40%, and the Nasdaq Composite added 0.45%.
Among the S&P 500 sectors, energy led the way with a 1.3% increase, while materials gained 0.8%. Defensive sectors, such as consumer staples, lagged behind with a 0.4% drop.
As the third quarter comes to a close, market movements may remain relatively muted until companies report their quarterly results in the coming weeks.
Although the S&P 500 has experienced a 5.5% decline since late July, it is still up approximately 13% for the year.
Angelo Kourkafas, senior investment strategist at Edward Jones, explained that in a world of prolonged high interest rates, there is less urgency to aggressively buy pullbacks, which the market will have to contend with in the coming months.
Throughout the week, investors will closely monitor economic data, including durable goods and the personal consumption expenditures price index for August, as well as second-quarter Gross Domestic Product. They will also pay attention to remarks from Fed policymakers, including Chair Jerome Powell.
Chicago Fed President Austan Goolsbee emphasized in an interview with CNBC that inflation remaining above the Fed’s 2% target poses a greater risk than overly tight central bank policy slowing the economy more than necessary.
In company news, Amazon.com shares rose 1.7% after the e-commerce giant announced its plan to invest up to $4 billion in startup Anthropic to compete in the artificial intelligence sector.
On the NYSE, declining issues outnumbered advancers, with 52 new highs and 341 new lows. On the Nasdaq, declining issues also outnumbered advancers, with 45 new highs and 426 new lows.
Approximately 9.1 billion shares were traded on U.S. exchanges, slightly below the 10 billion daily average over the last 20 sessions.
This article was reported by Lewis Krauskopf in New York, Ankika Biswas and Shashwat Chauhan in Bengaluru, and edited by Arun Koyyur, Maju Samuel, and Richard Chang.
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