NEW YORK: U.S. stocks rallied on Monday, clawing back some losses from their worst week since April.
The S&P 500 rose 0.5% in midday trading and is on track to snap a three-day losing streak. It would be the first gain for the index since hitting an all-time high on Tuesday.
The Dow Jones industrial average was up 21 points, or 0.2%, as of 11:30 a.m. ET, and the Nasdaq was 0.7% higher.
Nvidia rose 2.4% and other Big Tech stocks also recovered some of their sharp declines from the previous week to support the market. They sputtered amid criticism that they had become too expensive after a meteoric rise and were the main reasons Wall Street hit records. Two of them, Alphabet and Tesla, will announce on Tuesday how much profit they made during the spring in a big test. Each rose by at least 1.7%.
Treasury yields were relatively steady in the bond market after President Joe Biden announced he would not seek re-election. The move could unwind some of the market’s “Trump trades,” which took off after Biden’s lackluster performance in a debate last month raised expectations of a victory for former President Donald Trump.
Bank stocks rallied on forecasts of looser regulations after the Republican takeover, for example, and longer-term Treasury yields rose more than short-term ones on expectations of policies that could increase already high US government debt.
But Biden’s step aside over the weekend didn’t come as much of a surprise to the market. According to Brian Jacobsen, chief economist at Annex Wealth Management, it was a matter of when, not if.
“This could reduce the chances of a Trump victory, but Democrats must first rally around a candidate.”
The yield on the 10-year Treasury note was steady at 4.24%, where it was late Friday. Short-term yields also held firm. The two-year yield remained at 4.52%, where it was late Friday.
Other corners of the market, which could have swung sharply on election uncertainty, were also mostly quiet. The value of the US dollar was relatively stable against its biggest rivals.
Meanwhile, news about corporate earnings and growth in the US economy could continue to grab the market’s attention. Analysts expect companies in the S&P 500 to post their strongest quarterly earnings growth since the end of 2021, according to FactSet.
Truist Financial rose 2.9% after the bank reported net interest income, a key underlying measure of overall profit, that analysts said was stronger than expected.
Verizon Communications plunged 6.4% after reporting quarterly profit that met analysts’ expectations but lackluster sales.
In addition to Alphabet and Tesla, dozens of other major U.S. companies, including Coca-Cola, Ford and American Airlines, will report their latest quarterly results this week.
Airlines faced massive disruption last week due to a global technology outage that appeared to be resolved over the weekend, although airport delays continued on Monday.
The faulty software update caused havoc worldwide and led to the suspension of many flights by almost all airlines. The vast majority of cancellations early Monday were Delta Air Lines flights. Delta shares lost 1.9%.
Cybersecurity firm CrowdStrike said the issue believed to be behind the outage was not a security incident or cyber attack and that it had deployed a patch. The company said the problem lies in a faulty update sent to PCs running Microsoft Windows.
CrowdStrike shares fell another 12.5% on Monday after gaining 11.1% on Friday.
On foreign stock markets, indices rose in a large part of Europe.
In Asia, Hong Kong’s Hang Seng rose 1.3%, but shares in Shanghai fell 0.6% after China’s central bank unexpectedly cut its key lending rate. The move came after the government recently reported that the world’s second-largest economy grew more slowly than expected in the second quarter.
