By Sruthi Shankar, Johan M. Cherian, and Carolina Mandel
(Reuters) – The U.S. dollar index rose on Monday to its highest level in more than a week, supported by a rise in semiconductor stocks and a report indicating that the incoming Trump administration may adopt a less stringent tariff stance than expected.
The index fell 25.57 points, or 0.06%, to 42,706.56 points, the S&P 500 index gained 32.91 points, or 0.55%, to 5,975.38 points, and the Nasdaq Composite index gained 243.30 points, or 1.24%, to 19,864.98 points.
Seven of the 11 sectors in the S&P 500 index closed lower, but communications and technology services stocks rose 2.13% and 1.44%, respectively.
“What we're seeing is more of what happened last year, which is a rally concentrated in the largest stocks,” said Michael Green, portfolio manager at Simplify Asset Management, adding that inflows from 401(k) retirement plans are helping to propel stocks. higher.
Chipmakers got a boost from Microsoft's (NASDAQ:) plan to invest $80 billion to develop data centers based on artificial intelligence, in addition to… Foxconn (SS:) Q4 revenues that beat expectations.
Nvidia (NASDAQ:) shares rose 3.43%, Advanced Micro Devices (NASDAQ:) shares rose 3.33%, and Micron Technology (NASDAQ:) shares rose 10.45%. The Philadelphia Semiconductor Index jumped 2.84%.
Technology stocks rose despite benchmark 10-year Treasury yields reaching their highest levels since May.
U.S. stocks rebounded sharply on Friday after a string of losses in December and the first few sessions of January, when concerns about soaring valuations, rising Treasury yields and weak liquidity sent traders retreating after a strong rally in 2024.
Automakers' shares rose, with Ford (NYSE:) up 0.40% and General Motors (NYSE:) up 3.40% after a press report said that the incoming administration of President-elect Donald Trump is focused on imposing tariffs on every country, but only Certain sectors are considered important for the growth of the economy. National or economic security. Trump later refuted the report.
“He came out and said he wouldn't ease his tariff plan, but the seed was planted that the Trump administration's tariff policies wouldn't be quite as shocking as people had originally feared,” said Brian Jacobsen, chief economist at the Bank of England. Wealth Management Supplement.
Automakers are considered the most vulnerable to tariffs imposed on US trading partners, due to their extensive supply chains.
In the run-up to Trump's inauguration on January 20, investors are seeking insight into his policies, which are widely seen as beneficial to US businesses as well as the US economy.
Citigroup (NYSE:) rose 2.45% after a bullish rating from Barclays (line:). An index tracking banks rose 0.22%. Fed Vice Chairman for Supervision Michael Barr, who has sought a set of tough rules on the nation's largest banks, said he would resign.
In a week filled with economic data and speeches by US Federal Reserve officials, investors will be looking for clues about the pace of monetary policy easing this year. Later in the week, the focus will be on the monthly payroll report.
While Trump's proposals may boost corporate profits and stimulate the economy, they also risk pushing inflation higher. Federal Reserve Governor Lisa Cook was the latest among a number of policymakers to warn that inflation risks remain in the new year.
Advancing issues outnumbered decliners 1.01 to 1 on the NYSE and 1.1 to 1 on the Nasdaq.
The S&P 500 recorded eight new 52-week highs and eight new lows, while the Nasdaq Composite recorded 97 new highs and 39 new lows.
Trading volume on American stock exchanges reached 17.36 billion shares, compared to an average of 12.37 billion during the last 20 trading days.
Markets will be closed on Thursday for a national day of mourning marking the death of former President Jimmy Carter.
