U.S. stocks closed higher on Monday as investors looked ahead to speeches from several Federal Reserve policymakers later in the week for clues about the central bank’s plans.
The three major U.S. stock indices edged higher on Monday. The Dow Jones Industrial Average (DJI) rose 34.54 points, or 0.10 percent, to 34,095.86. The S&P 500 (SPX) gained 7.64 points, or 0.18 percent, to 4,365.98. Meanwhile, the Nasdaq Composite (IXIC) climbed 40.50 points, or 0.30 percent, to 13,518.78.
The Dow and S&P 500 extended their winning streaks to six consecutive days, while the Nasdaq rose for the seventh consecutive day. This is the longest winning streak for the S&P 500 since early June, for the Dow since July and for the Nasdaq since January.
Last week, the S&P 500 and the Nasdaq saw their largest weekly gains in nearly a year of around 5.85 percent and 6.61 percent, respectively.
The NYSE saw 64 stocks reach new highs and 43 stocks hit new lows, while the Nasdaq recorded 46 new highs and 113 new lows. In contrast, the S&P 500 index posted nine new highs and no new lows.
Like Wall Street, the MSCI’s global stock index rose 0.4 percent, extending its winning streak to six consecutive sessions. However, the pan-European STOXX 600 index fell 0.16 percent, as the major stock indexes in France, Germany, Italy and Spain declined.
In the bond market, the benchmark 10-year U.S. Treasury yield rebounded on Monday to reach a high of 4.668 percent. It reversed some of the 29 basis points (bps) decline last week when the benchmark note posted its most significant weekly drop since March. The yield fell to a five-week low of 4.556 percent on Friday.
Wall Street’s recent rally happened ahead of this week’s Treasury auction of about $112 billion in three-year, 10-year and 30-year bonds.
Fed to cease rate hikes
The Monday gain was driven by expectations that the Fed, prompted by a weaker-than-expected U.S. payroll report published on Friday, may cease raising interest rates and begin cutting them next year.
Investors will be closely following speeches by Fed officials later this week, including Chair Jerome Powell, New York Fed President John Williams and Dallas Fed President Lorie Logan, for clues about the central bank’s plans.
According to CME’s FedWatch Tool, market expectations suggest a 90.4 percent likelihood of unchanged interest rates in the central bank’s December meeting, down from 95.2 percent on Friday but still up from 74.4 percent a week ago.
Expectations for a rate cut of at least 25 basis points at the May 2024 meeting have increased to over 50 percent.
Earning reports
By Friday, 403 companies in the S&P 500 had reported third-quarter earnings. 81.6 percent of those reported earnings exceeding analyst estimates, according to LSEG data.
Dish Network’s (DISH.O) stock price plunged 37.4 percent to close at $3.44 on Monday after touching a 25-year low of $3.41. This report follows news that the pay-TV provider missed third-quarter revenue estimates and CEO Erik Carlson would step down.
Bumble’s (BMBL.O) stock price also fell 4.4 percent on Monday after the dating app operator announced that founder Whitney Wolfe Herd would step down as CEO.
This week, notable companies such as Walt Disney (DIS.N), Instacart (CART.O) and Biogen (BIIB.O) are scheduled to release their earnings reports.