U.S. stocks rose in early trading on Monday as the U.S. and China held trade talks and investors looked ahead to this week’s interest rate decision from the Federal Reserve.
The Dow Jones Industrial Average was up 0.1% in early trading on Monday, while the S&P 500 gained 0.4%. The tech-heavy Nasdaq Composite advanced 0.6% to trade at a record high. The major stock indexes all posted gains last week, with the Nasdaq closing at a record high on Friday as investors bet lower interest rates are imminent.
Wall Street is overwhelmingly confident that the Fed will lower borrowing costs for the first time this year when it concludes its two-day policy meeting on Wednesday. Data released last week showed consumer inflation accelerated in August—though, by no more than Wall Street was expecting—while wholesale prices declined on the month, further cementing the likelihood of a 25 basis point cut this week. Investors will be scrutinizing Chair Jerome Powell’s press conference to gauge the Fed’s willingness to lower borrowing costs again at its two remaining meetings this year.
U.S.-China trade tensions took the spotlight Monday, with Treasury Secretary Scott Bessent heading up talks in Madrid. Bessent said the two countries were close to reaching an agreement on TikTok, the Chinese-owned video app that is facing a U.S. ban. President Trump later implied the deal had been agreed on.
Possibly complicating the talks: Chinese regulators on Monday accused chip giant Nvidia (NVDA) of violating antitrust law with its acquisition of an Israeli networking technology company in 2020. Nvidia, shares of which fell more than 1%, has become an increasingly attractive target for Chinese authorities seeking to gain leverage in trade negotiations and foster a homegrown AI industry.
Tesla (TSLA) shares jumped 7%, leading tech mega-caps after a regulatory filing showed CEO Elon Musk bought $1 billion of stock on Friday. The stock purchases were seen as a demonstration of Musk’s commitment to the electric vehicle maker, the board of which recently proposed a pay package that could top $1 trillion.
Big tech stocks were mostly higher on Monday. Oracle (ORCL) stock rose more than 4%. Alphabet (GOOG) gained 3%, while Apple (AAPL) and Amazon (AMZN) each rose 1%. Meta Platforms (META) and Microsoft (MSFT) both ticked higher. Broadcom (AVGO) dipped about 0.5%.
Treasury yields were mostly lower on Monday, with the 10-year yield, which affects borrowing costs on a variety of consumer and commercial loans, declining to 4.04% from 4.07% at Friday’s close. Yields have declined to their lowest levels this year in anticipation of Fed rate cuts.
Gold futures ticked up 0.1% to $3,690 an ounce on Monday. West Texas Intermediate futures, the U.S. crude oil benchmark, rose 0.8% to $63.20 a barrel.
Bitcoin recently traded around $115,000, down from an overnight high of $116,700. The cryptocurrency came under pressure last month after hitting a record high of more than $124,000, but has trended higher in recent weeks after sliding.
The U.S. dollar index, which tracks the value of the greenback against a basket of foreign currencies, was recently down 0.2% at 97.40.