US stocks experienced a notable rise on Monday, driven by increasing pressure on the dollar and a surge in gold prices. The market appeared optimistic ahead of a significant week that includes a Federal Reserve rate decision and earnings reports from major tech companies.
The Dow Jones Industrial Average saw an increase of 0.4%, while the S&P 500 rose by 0.6%. The Nasdaq Composite, known for its tech-heavy listings, also gained 0.6%, marking a recovery after two consecutive weeks of losses for all three indexes.
Cautious optimism on Wall Street was bolstered by remarks from President Trump, who announced that he would send “border czar” Tom Homan to Minnesota to oversee ICE operations in the aftermath of a protestor’s fatal shooting. Investors were weighing the implications of this incident, as concerns about the political fallout could impact bipartisan efforts to prevent a federal shutdown, thereby increasing demand for safe-haven assets.
Gold, which has been on a relentless upward trend, broke the $5,000 mark per ounce for the first time on Sunday and continued to gain on Monday, benefiting from a weaker dollar. The US dollar itself fell to a four-month low amid speculation about potential intervention partnerships with Japan to curb the yen’s depreciation. This decline followed aggressive trade threats from Trump, including a warning of 100% duties on Canada related to a trade deal with China.
While currencies have taken a back seat to stocks during the post-pandemic market recovery—where the focus has been on earnings growth, AI-related optimism, and the robustness of US equities—some analysts suggest that Trump’s trade threats could shift attention back to currency issues.
This week promises a flurry of earnings reports that will be critical in shaping market sentiment, particularly from four of the “Magnificent Seven” tech giants. Microsoft, Meta, and Tesla are set to release their results on Wednesday, followed by Apple the next day. Investors will be keenly observing AI spending projections, especially after Intel’s recent disappointing forecast highlighted challenges within the AI sector.
Meanwhile, the Federal Reserve’s policy decision is anticipated at the conclusion of its two-day meeting on Wednesday, with expectations leaning towards maintaining current interest rates. Wall Street is closely monitoring how long the Fed may hold off on its next rate cut, given the internal divisions among policymakers and the ongoing tensions with the White House, where Trump might hint at a potential replacement for Fed Chair Jerome Powell, with BlackRock’s Rick Rieder seen as a frontrunner.
This week could mark a transformative period for the markets as investors digest pivotal earnings and policy news, maintaining a hopeful outlook amidst the ongoing complexities.