The Dow Jones Industrial Average and the S&P 500 reached unprecedented heights on Monday, reflecting market participants' reassessment of statements made by three officials from the Federal Reserve regarding recent decisions on monetary policy. The Dow climbed 0.2%, ending at 42,124.7, while the S&P 500 rose 0.3% to close at 5,718.6.
The Nasdaq Composite also saw a modest increase of 0.1%, settling at 17,974.3. Notably, the energy and consumer discretionary sectors spearheaded the day's gains, while the health care sector experienced the most significant setback. The previous Wednesday marked a pivotal meeting of the Federal Open Market Committee (FOMC), during which the central bank opted to lower its benchmark lending rate by 50 basis points, now situated within a range of 4.75% to 5%.
This decision has drawn considerable attention, with Federal Reserve officials indicating their belief in its appropriateness. Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari articulated on Monday that subsequent policy adjustments will largely depend on forthcoming economic data. In a related note, Chicago Fed President Austan Goolsbee expressed he felt 'comfortable' with the recent 50-basis-point interest rate reduction.
Goolsbee emphasized his viewpoint, stating, 'To me, the specific timing of the initial cut is less important than the longer-arc view that conditions are good on both sides of the mandate.' He further stated, 'Rates need to come down significantly going forward if we want the conditions to stay that way.' On the other side of the discussion, Fed Governor Michelle Bowman remarked that the FOMC's decision could be interpreted as 'a premature declaration of victory' in the fight against inflation, highlighting the delicate balance the central bank must maintain. In a broader context, the US 10-year yield edged higher by 2.1 basis points, reaching 3.75% on Monday, while the two-year rate rose by 1.3 basis points to 3.59%.
In terms of economic indicators, the growth of US private-sector output saw a decline, reaching a two-month low in September as the manufacturing sector continued to show signs of weakness. Concurrently, the one-year headline outlook has sharply deteriorated, as per S&P Global's flash purchasing managers' index (PMI). In energy markets, West Texas Intermediate crude oil experienced a slight drop of 0.7%, trading at $70.53 a barrel. Turning to company-specific news, shares of Tesla ($TSLA) surged by 4.9%, making it the standout performer on both the Nasdaq and the S&P 500, following an upgrade from Tudor Pickering Holt that boosted the electric vehicle maker's delivery estimates for the third quarter.
Similarly, Intel ($INTC) was highlighted as the best performer on the Dow, also featuring among the top gainers in the S&P 500 and Nasdaq, with its shares appreciating by 3.3%. Reports suggest that Apollo Global Management ($APO) has proposed an investment of up to $5 billion in the chipmaker, propelling Apollo's shares up by 0.6% on Monday. Moreover, Qualcomm ($QCOM) has engaged with Intel regarding a potential acquisition.
Conversely, Moody's ($MCO) saw its shares decline by 3.2%, marking the second-largest drop in the S&P 500 after Raymond James downgraded the stock from a market perform to underperform rating. Upcoming earnings releases include major players such as Costco Wholesale ($COST), Accenture ($ACN), Micron Technology ($MU), Cintas ($CTAS), and AutoZone ($AZO), who are all set to provide their latest quarterly financial results later this week. In commodities, gold prices increased by 0.2% to $2,651.40 per troy ounce, while silver experienced a decrease of 1.6%, closing at $31 per ounce..