Wall Street closed higher on Monday, driven by tech and financial stocks. Investors showed less apprehension about the regional bank credit quality issue and were upbeat about the government shutdown possibly coming to an end. All three benchmark indexes finished in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) climbed 1.1%, or 515.97 points, to close at 46,706.58. Twenty-five components of the 30-stock index ended in positive territory, four ended in negative, while one remained unchanged.
The tech-heavy Nasdaq Composite added 310.57 points, or 1.4%, to close at 22,990.54.
The S&P 500 gained 71.12 points, or 1.1%, to close at 6,735.13. Nine of the 11 broad sectors of the benchmark index closed in the green. The Materials Select Sector SPDR (XLB), the Industrials Select Sector SPDR (XLI) and the Financials Select Sector SPDR (XLF) advanced 1.2% each, while the Consumer Staples Select Sector SPDR (XLP) fell 0.1%.
The fear gauge CBOE Volatility Index (VIX) decreased 12.3% to 18.23. A total of 17.5 billion shares were traded on Monday, lower than the last 20-session average of 20.2 billion. Advancers outnumbered decliners by a 4.81-to-1 ratio on the NYSE and by 3.34-to-1 on the Nasdaq.
Tech Optimism Lifts Wall Street as Record AAPL Valuation Boosts Market
On Monday, Apple Inc.’s AAPL stock added 3.9% to hit an all-time high, igniting optimism about the strength of consumer demand and the durability of corporate earnings. Robust early sales data for new technology products reassured investors that spending remained resilient despite higher borrowing costs. The company’s surge boosted overall market sentiment, lifting benchmark indexes and renewing hopes that the upcoming earnings season could exceed expectations. Gains in the tech sector also eased broader concerns about slowing growth, as investors interpreted the move as a sign of ongoing innovation-driven expansion.
Consequently, shares of Netflix, Inc. NFLX and Meta Platforms, Inc. META jumped 3.3% and 2.1%, respectively. While NFLX currently carries a Zacks Rank #3 (Hold), META has a #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Markets Gain as Shutdown Optimism Outweighs Bank Credit Worries
Investors brushed aside concerns about regional bank credit issues on Monday, interpreting them as isolated challenges rather than signs of broader financial instability. Recent reports indicated that most mid-sized lenders did not have a capitalization issue and remained liquid, even as some increased provisions for commercial real estate loans. This reassured markets that any potential stress was contained.
At the same time, optimism grew that the government shutdown impasse in Washington was nearing resolution. White House adviser Kevin Hassett said that the 20-day government shutdown may end this week amid improving bipartisan negotiations in Congress. Investors anticipate restored policy stability and uninterrupted federal spending. The prospect of renewed government operations also meant fewer disruptions to economic data and public programs.
With fears over banking risks fading and political tensions easing, major indexes advanced, reflecting renewed investor confidence in both financial stability and economic momentum.
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Apple Inc. (AAPL): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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