US equity indexes experienced an upward trend on Monday, buoyed by a robust performance in semiconductor manufacturers that has significantly bolstered the technology sector. This positive momentum comes just ahead of the pivotal labor market data and the upcoming quarterly earnings announcements, which may shape investor sentiment moving forward. The S&P 500 saw a notable increase of 0.9%, reaching 5,996.2, while the Nasdaq Composite surged by 1.5% to close at 19,910.4.
In parallel, the Dow Jones Industrial Average moved up by 0.4%, landing at 42,888.4. Noteworthy sectors contributing to this growth included communication services and consumer discretionary, with many stocks in these areas experiencing considerable gains. The semiconductor stocks were a highlight of the trading session, exemplified by Micron Technology, which experienced a remarkable rise of over 13%, making it the leading gainer on both the S&P 500 and the Nasdaq.
Additionally, Hon Hai Precision (commonly known as Foxconn) reported a staggering 42% year-over-year revenue increase in December, amounting to NT$654.8 billion ($19.98 billion) as per the company's recent release. It’s essential to note that Foxconn manufactures electronic products for major global players, including Apple (AAPL), to which Micron also supplies chips.
Notably, Apple shares rose by 0.7% during this trading session. D.A. Davidson highlighted in a research note that investors are gravitating towards technology stocks, driven by sustained optimism regarding artificial intelligence (AI) advancements while they await crucial US economic indicators that are likely to influence interest rate expectations. This week's data releases are significantly anticipated, encompassing crucial job openings and hiring statistics on Tuesday, alongside private payroll figures from ADP and the minutes from the Federal Open Market Committee meeting held on December 17-18, set to be released on Wednesday.
In addition, Thursday's scheduled data will feature Challenger layoff intentions, culminating in the release of the nonfarm employment report on Friday. Interest rate changes have become a focal point for investors, particularly as longer-term government bond yields attract scrutiny. Nancy Vanden Houten, Lead US Economist at Oxford Economics, remarked in a note that a vital inquiry remains whether homebuyers and sellers are acclimating to the prevailing higher mortgage rates.
Houten emphasized that if rates sustain above 7%, it could pose significant challenges given that the 30-year fixed mortgage rate has increased by 22 basis points over the last month. In terms of bond yields, US Treasury yields exhibited mixed results throughout the trading session. The 10-year Treasury yield climbed by 2.1 basis points to 4.62%, while the two-year rate saw a slight decline of 1.5 basis points, settling at 4.26%. Portfolio managers are also gearing up for notable earnings reports this week from companies like Bank of America (BAC), Wells Fargo (WFC), and BlackRock (BLK), along with Delta Air (DAL) and Constellation Brands (STZ), which are expected to attract considerable investor attention. In the economic sector, new orders for US factory goods fell by 0.4% in November, aligning with analyst expectations in a survey by Bloomberg.
This follows a revised 0.5% increase in October, and had it not been for a 3% drop in transportation orders, new orders would have exhibited a 0.2% rise, which mirrors the prior month's performance. Additionally, the S&P Global US services index underwent a downward revision to 56.8 for December, down from the flash reading of 58.5, which was contrary to the expectations of no revision reflected in a Bloomberg survey.
Despite this adjustment, the index remains above November’s reading of 56.1 and stands at a 33-month peak. Meanwhile, commodity markets saw movements with West Texas Intermediate crude oil futures decreasing by 0.5%, trading at $73.46 per barrel. Gold futures declined by 0.3% to $2,647.31 per ounce, while silver futures gained 1.9%, increasing to $30.62 per ounce..