U.S. stocks closed mostly higher Monday, with the S&P 500 and the Nasdaq each snapping a four-day losing streak on the back of a recovery in technology shares.
The day’s gains were fairly broad-based, with eight of the 11 primary S&P 500 industry groups finishing in positive territory led by utilities and real estate, while the Dow Jones Transportation Average rallied to a record.
How did the main benchmarks fare?
The S&P 500 SPX, +0.19% rose 5.45 points, or 0.2%, to finish at 2,877.13 and the Nasdaq Composite Index COMP, +0.27% gained 21.62 points, or 0.3%, to 7,924.16. The Dow Jones Industrial Average DJIA, -0.23% fell 59.47 points, or 0.2%, to 25,857.07 but the Dow transports DJT, +1.82% climbed 1.8% to 11,554.08.
Both the S&P and the Nasdaq are coming off four straight daily declines. Last week was the S&P’s first negative week of the past four, and it represented the biggest weekly percentage drop since June. The Nasdaq suffered its biggest weekly drop since March.
What drove the market?
Recent market activity has been driven in part by uncertainty surrounding trade between the U.S. and its major trading partners. President Donald Trump recently threatened China with the latest in a series of tariffs, which would impact an additional $267 billion in Chinese goods. This comes on top of an already-proposed $200 billion in tariffs.
Investors are concerned that such measures, especially if they are met with retaliatory actions by other countries, could spiral into a full-on trade war, one that could have negative implications for global economic growth.
Technology stocks have also driven trading of late, with the sector—by far the strongest performer thus far this year—seeing steep losses last week. The group can be sensitive to trade issues. Over the weekend, Trump published a tweet urgingApple Inc. AAPL, -1.34% to shift production out of China to the U.S. Apple said tariffs against China would impact a “wide range” of its products.
What were strategists saying?
“We’re still near all-time highs despite last week’s selloff, but the main priority for investors will be to take a look at what all is going on. There’s so much to take in this week — between tariffs, tech, all the economic data that will come out — and with all those moving parts, no single thing can be pulled out as the factor moving markets,” said Mary Ryan, senior equity options strategist at E-Trade.
Ryan added that she was paying particular attention to the trade issue. “When it seems like [the tariffs] numbers are being thrown out at random, it makes it very difficult to make concrete calculations about what kind of impact they could have. When it comes to the tech sector, for example, how will tariffs impact retail investors? Certain prices?”
“Emerging markets have had a tough year but still offer investors longer-term opportunities. According to projections from the [Brookings Institution], an estimated 2.3 billion people will enter the middle class by 2030, 88% of which reside in Asia. Investors should continue to position portfolios to participate in the rapid growth of Asia’s middle class over the long-term,” said Jason Pride, chief investment officer of private client for Glenmede, in a note.
Which stocks were in focus?
Shares in Apple fell 1.3% in the wake of Trump’s comments but still up 29% for the year.
Tesla Inc. shares TSLA, +8.46% rallied 8.5% after Chief Executive Elon Musk announced a management shake-up late Friday. That move came after the car maker’s stock slumped in Friday’s session as more executives departed and Musk appeared to smoke marijuana during an interview.
Nike Inc. NKE, +2.24% shares rose 2.2% after data showed that the company’s online sales grew 31% following its decision to craft its “Just Do It” campaign around ex–NFL player Colin Kaepernick. Nike was also the best Dow performer of the day.
Science Applications International Corp. SAIC, -9.14% said it would buy Engility Holdings Inc. EGL, -0.11% in a stock deal valued at $2.5 billion, including the repayment of $900 million in debt. Shares of Science Applications sank 9.1% while Engility edged down 0.1%.
United Rentals Inc. URI, +5.05% said it would buy BlueLine Rental in a cash deal valued at $2.1 billion. Shares of United rose 5.1%.
Snap Inc. SNAP, -1.91% fell 1.9% after the company said its chief strategy officer would be the latest executive to leave the company.
Shares in Alibaba Group Holding Ltd. BABA, -3.70% slid 3.7% following news that tycoon Jack Ma plans to step down as executive chairman of the Chinese e-commerce giant in a year.
CBS Corp.’s stock CBS, -1.53% dropped 1.5% after Les Moonves, the longtime chairman and CEO, resigned Sunday following new sexual misconduct allegations against him from six additional women.
Which economic reports were in focus?
Boston Federal Reserve President Eric Rosengren said, in an interview with MarketWatch, that he doesn’t read much about the danger of a possible recession from the shape of the yield curve. He also said financial risks now are coming from smaller banks.
What were other markets doing?
Stocks in Asia fell after Trump’s comment on Apple’s production, which put some pressure on Asian tech stocks. European stocks ended modestly higher.
Oil futures CLV8, +0.12% reversed direction to slide amid continued concerns over the impact of renewed sanctions on Iran and signs of a pickup in crude demand from China.
