Stock Markets Climb Higher, Nearing Weekly Increases; FedEx Soars
The U.S. stock markets experienced a positive session on Monday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all registering gains. The S&P 500 posted 15 new 52-week highs and seven new lows, while the Nasdaq Composite recorded 90 new highs and 21 new lows, indicating a generally bullish trend.
The rise in the three indexes was influenced by revived optimism around AI-linked stock trading and expectations of further monetary policy easing from the Federal Reserve. The Fed's first rate cut of 2025 and indications of additional easing contributed to the upward momentum.
The small-cap Russell 2000 index, however, was down 0.1% after briefly hitting an intraday record high. The consumer discretionary sector, on the other hand, rose 0.8% due to the strong performance of FedEx, which gained 1.7% after reporting quarterly profit and revenue above analyst estimates. Cost-cutting and strength in domestic deliveries helped FedEx's performance, but weaker international volumes were noted in its quarterly results.
Financial and energy companies lost 0.3% and 0.9% respectively. Lennar fell 2.5% after the homebuilder reported a lower third-quarter profit and forecast fourth-quarter home deliveries below estimates.
Apple gained 1.3% following a price target raise from J.P. Morgan, while Tesla was up 2.6% after Baird's upgrade on the stock to "outperform" from "neutral".
Wall Street's three main indexes are in positive territory so far in September, despite September historically being a bad month for U.S. equities. The benchmark S&P 500 has shed 1.4% on average in the month of September since 2000.
Minneapolis Fed President Neel Kashkari expects quarter-point sized rate cuts at each of the Fed's final two meetings of the year. Neel Kashkari also supports cutting interest rates three times in 2025, citing concerns over a weak labor market and low inflation risks, and advocates for 25-basis-point cuts in October and December, with a neutral rate estimated at 3.1%.
San Francisco Fed President Mary Daly is set to speak later in the day. U.S. President Donald Trump and Chinese counterpart Xi Jinping spoke by phone regarding TikTok and easing tensions between the two superpowers.
Analysts expect some volatility from "triple witching", where options and futures linked to stock indexes and individual stocks are set to expire. On the NYSE and Nasdaq, declining issues outnumbered advancers by a 1.32-to-1 ratio and a 1.28-to-1 ratio respectively.
In the context of these market movements, investors and analysts will be closely watching the upcoming speeches and economic indicators to gauge the direction of the markets in the coming weeks.
