In a positive turn for the financial markets, US equity indexes experienced upward movement while the majority of government bond yields saw a decline during midday trading on Monday. The Nasdaq Composite index made a notable climb of 0.4%, reaching 17,703.5 points, while the S&P 500 advanced 0.5% to 5,580.1 points.
The Dow Jones Industrial Average also followed suit, increasing by 0.4% to settle at 40,835.5 points. This general uptrend was observed across all sectors, highlighting a broad-based market rally, with communication services and consumer discretionary sectors leading the charge among gainers. In terms of economic performance, recent reports revealed that the Conference Board's measure of leading indicators showed a decline of 0.6% in July, which fell short of the anticipated decrease of 0.4% according to a survey conducted by Bloomberg.
This downturn comes on the heels of a 0.2% decline noted in June, signaling a potential cautionary trend in leading economic indicators. On the retail front, the US Census Bureau documented a modest rise in online retail sales, which increased by 1.3% in the second quarter. This growth, although positive, represents a slowdown compared to the 1.6% increase recorded in the last quarter.
When year-over-year comparisons are made, online retail sales demonstrate a more robust annual growth of 6.7%. Home sales also trended down as reported by Redfin (RDFN), which disclosed a 2% decrease in existing US home sales, adjusting to a seasonally adjusted annual rate of 4.09 million. This figure marks the lowest level recorded for July, dating back to the start of tracking in 2012; however, it showed a slight uptick of 0.6% from June. Meanwhile, the bond markets reacted with most Treasury yields falling, with the 10-year yield dipping by 3.4 basis points to a rate of 3.86%.
Simultaneously, the two-year Treasury rate experienced a 2.1 basis point decline, landing at 4.05%. In commodities, West Texas Intermediate crude oil saw a downturn of 2.4%, settling at $74.79 per barrel. Focusing on company-specific news, Advanced Micro Devices ($AMD) announced its plan to acquire ZT Systems, a company specializing in artificial intelligence infrastructure solutions, for an estimated $4.9 billion.
This strategic acquisition aims to bolster AMD's growth prospects in the AI data center segment, and in response, AMD’s shares rose by 2.5% in trading. In contrast, Estee Lauder ($EL.US) painted a less optimistic picture as it issued a cautious earnings forecast for fiscal year 2025 amid ongoing fatigue in demand from the Chinese market.
Additionally, the company’s CEO, Fabrizio Freda, announced his intent to retire in the coming year, adding further challenges to the cosmetics giant's outlook..