U.S. equity markets bounced off seven-month lows on Monday, with major indices broadly higher by midday as President Donald Trump disclosed active negotiations with a “new and more reasonable” Iranian regime while Fed Chair Jerome Powell downplayed the need for imminent rate hikes.
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Powell reinforced the cautiously optimistic mood at Harvard University on Monday, where he said President Trump’s tariffs represented a “one-time price bump” and that the central bank has limited ability to offset supply shocks like war-driven energy surges.
“Inflation expectations appear to be well-anchored,” Powell said.
Markets interpreted Powell’s remarks as modestly dovish: the implied probability of a Fed rate hike in 2026 dropped to around 18%, as per the CME FedWatch tool.
The yield on the 10-year U.S. Treasury note fell around 10 basis points to 4.34%, pulling back from the eight-month highs struck on Friday. The 2-year note also fell about 10 basis points to 3.82%, while the 30-year bond yielded 4.90%, down seven basis points.
Across U.S. equity markets by midday Monday, gains were broad-based, with nine of 11 S&P 500 sectors advancing.
The S&P 500 advanced 0.7% to 6,413, while the Dow Jones Industrial Average gained 1.1% to 45,650. The Nasdaq 100 gained 0.5% to 23,240.
Within Magnificent Seven stocks, Amazon.com, Inc. (NASDAQ:AMZN) and Meta Platforms, Inc. (NASDAQ:META) led with advances of around 2%, while Microsoft Corp. (NASDAQ:MSFT) added 1.9%.
Gold added 1.2% to $4,547 per troy ounce, with the SPDR Gold Trust (NYSE:GLD) tracking the move higher as bond yields retreated and dollar strength paused. Silver gained 2.2% to $71.11 per ounce.
WTI crude oil advanced 2.3% to $101.97 per barrel.
Monday’s Performance In Major U.S. Indices
| Index | Last | Daily % Change | MTD |
|---|---|---|---|
| S&P 500 | 6,413 | +0.70% | -6.83% |
| Dow Jones | 45,650 | +1.07% | -6.72% |
| Nasdaq 100 | 23,240 | +0.46% | -7.02% |
| Russell 2000 | 2,447 | -0.12% | -7.88% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) gained 0.7%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) rose 1.1%.
- The Invesco QQQ Trust (NASDAQ:QQQ) was down 0.11%.
- The iShares Russell 2000 ETF (NYSE:IWM) slipped 0.67%.
Financials Lead Relief Rally As Yields Retreat; Cybersecurity Stocks Surge
The Financial Select Sector SPDR Fund (NYSE:XLF) led Monday’s broad sector recovery with a gain of 1.7%, as retreating Treasury yields eased credit cost concerns and JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp. (NYSE:BAC) each rose more than 1%.
The Materials Select Sector SPDR Fund (NYSE:XLB) rose 1.6% and the Real Estate Select Sector SPDR Fund (NYSE:XLRE) gained 1.6%, with both sectors benefiting from the pullback in long-term rates. The Utilities Select Sector SPDR Fund (NYSE:XLU) advanced 1.4%.
Among industry ETFs, the SPDR S&P Insurance ETF (NYSE:KIE) jumped 2.1%, the session’s strongest industry performer. The VanEck Gold Miners ETF (NYSE:GDX) rose 2% in tandem with gold’s advance, and the VanEck Agribusiness ETF (NYSE:MOO) added 1.5%.
In cybersecurity, Palo Alto Networks, Inc. (NASDAQ:PANW) surged 7.3%, among the S&P 500’s best performers on the session, while peer CrowdStrike Holdings, Inc. (NASDAQ:CRWD) advanced 4.9%.
Monday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| United Therapeutics Corp. (NASDAQ:UTHR) | +13.08% |
| Alcoa Corp. (NYSE:AA) | +12.55% |
| Bath & Body Works, Inc. (NYSE:BBWI) | +9.75% |
| Palo Alto Networks, Inc. | +7.31% |
| FMC Corp. (NYSE:FMC) | +6.73% |
Monday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Fermi Inc. (NASDAQ:FRMI) | -16.36% |
| Sysco Corp. (NYSE:SYY) | -12.77% |
| Boston Scientific Corp. (NYSE:BSX) | -10.39% |
| Astera Labs, Inc. (NASDAQ:ALAB) | -7.86% |
| MP Materials Corp. (NYSE:MP) | -7.52% |
Photo: Courtesy Federal Reserve