US stocks rallied on Monday, with the Dow Jones Industrial Average breaking through the 43,000 level for the first time as investors remained optimistic ahead of a key week for corporate earnings. The S&P 500 also reached new highs, driven by gains in tech and financial sectors. Despite rising Treasury yields and lingering geopolitical concerns, the market maintained its bullish momentum, lifted by strong performances in blue-chip stocks like McDonald’s, UnitedHealth Group, and Apple. With major earnings reports on the horizon, market participants are keeping a close watch on further developments. While the bond market was closed on Monday for Columbus Day, investors remained focused on rising Treasury yields.

Key Takeaways:

  • Dow Surpasses 43,000 for the First Time: The Dow Jones Industrial Average surged 201.36 points, or 0.47%, to close at a record 43,065.22, marking the first time the index has ended above the 43,000 mark. This milestone comes as investors gear up for major corporate earnings reports, including results from Bank of America and Goldman Sachs, which are expected to provide further market direction.
  • S&P 500 Hits Fresh All-Time High: The S&P 500 climbed 0.77%, closing at a new record of 5,859.85. The broad market index continues to perform strongly, breaking above the 5,800 level for the first time last Friday. Technology stocks were among the top performers, driving the index’s gains as investors anticipate robust earnings from key tech players.
  • Nasdaq Gains Nearly 1%: The Nasdaq Composite added 0.87%, closing at 18,502.69. This rally was supported by a strong performance in tech stocks, particularly Nvidia, which rose 2.4% to close at a record high of $138.07. Nvidia’s market cap now stands at $3.4 trillion, as the company continues to benefit from the AI boom, with demand for its GPUs from major tech firms like Microsoft, Meta, and Google fuelling its rise.
  • European Markets Continue to Climb: European stocks rose to a two-week high, with the pan-European Stoxx 600 up 0.5%. The FTSE 100 added 39.01 points, or 0.47%, to 8,292.66, marking its highest level in two weeks. The CAC 40 edged up 0.3% to close at 7,602, while Germany’s DAX gained 124 points, or 0.64%, closing at 15,800. Investors are hopeful ahead of the European Central Bank’s policy decision later this week, with expectations of a 25 basis point rate cut.
  • Asian Markets Rise Despite Mixed Signals from China: Asian markets mostly advanced, with China’s CSI 300 rising 1.9% to close at 3,691.3, despite mixed reactions to China’s weekend stimulus announcements. The Hang Seng Index in Hong Kong slipped 0.9%, while Japan’s Nikkei was closed for a holiday. In South Korea, the Kospi gained over 1%, closing at 2,623.29, supported by tech stocks, while Australia’s S&P/ASX 200 rose 0.47% to 8,252.8. Taiwan’s market edged 0.32% higher, closing at 22,975.29.
  • Oil Prices Drop Over 2%: US crude oil futures slid 2.12%, with West Texas Intermediate (WTI) closing at $73.96 per barrel. Brent crude fell 1.83%, settling at $77.59 per barrel, after OPEC cut its demand forecast for 2024 for the third consecutive time. Concerns over weakening demand from China, the world’s largest crude importer, also weighed on prices as traders anticipate lower growth.
  • Nvidia Closes at Record High, AI Boom Continues: Nvidia shares rose 2.4% to close at a record high of $138.07, pushing the company’s market cap to $3.4 trillion. The chipmaker has seen its stock price soar nearly 180% this year, driven by soaring demand for its GPUs used in artificial intelligence (AI) applications. Nvidia’s next-generation AI GPU, Blackwell, is expected to generate billions of dollars in revenue in the fourth quarter, further solidifying its dominance in the AI chip market.

FX Today:

  • Euro Struggles to Gain Momentum Amidst Resistance: The EUR/USD pair ended the session almost flat at 1.0904, up by just 0.02%. Trading within a narrow range of 1.0888 to 1.0907, the euro faced stiff resistance from the 200-period SMA at 1.1068. The pair remains capped by key resistance levels, while a break below 1.0885 could lead to further losses. Bulls will need a sustained move above 1.0950 to have a chance at recovery, though the 200-period SMA still looms as a critical barrier.
  • Pound Finds Support, But Upside Remains Limited: GBP/USD managed to hold above 1.3050, closing slightly higher at 1.3056 with a gain of 0.03%. The day’s range between 1.3042 and 1.3063 reflects cautious market action. Resistance at 1.3188 (200-period SMA) remains a key obstacle, while the 50-period SMA at 1.3099 adds further downside pressure. A break below 1.3040 could signal deeper declines toward 1.3000, though any bullish momentum above 1.3099 might open the path to test the 1.3188 level.
  • US Dollar Gains as Markets Await New Signals: The US Dollar Index (DXY) continued its upward trajectory as markets anticipate more economic data to provide direction. With the Federal Reserve’s next move on monetary policy in focus, the DXY showed signs of overbought conditions as it approached key resistance levels. Supports are found at 103.00 and 102.50, while resistance lies at 103.50 and 104.00. A pullback may be in store if momentum slows, though the dollar remains favoured by market sentiment for now.
  • Canadian Dollar Slips as Loonie Weakens Against USD: The Canadian Dollar continued its slide, falling another quarter of a percent against the US Dollar. USD/CAD climbed steadily, breaking above the 50-day EMA at 1.3600 and moving towards 1.3800. The pair is now showing strong upward momentum, with the potential for a golden cross as the 50-day EMA approaches the 200-day EMA. Resistance is expected around 1.3850, while the EMAs near 1.3600 should provide support on any dips, signalling that the outlook for the Loonie remains bearish.
  • Gold Stalls Near Key Resistance as Bulls Hesitate: Gold prices edged higher, closing at $2,650.77 with a modest gain of 0.09%. The precious metal traded between $2,646.87 and $2,651.53 during the session but failed to break above key resistance at $2,650. Support at the 200-period SMA at $2,587.17 remains solid, but resistance levels at $2,641.71 (50-period SMA) and $2,644.34 (100-period SMA) could limit further upside. Bulls need to push past $2,650 to aim for $2,670, though a pullback below $2,640 might trigger declines toward $2,620.

Market Movers:

  • SoFi Technologies Soars on Loan Platform Expansion: Shares of SoFi Technologies jumped 11.4% after the company announced a $2 billion agreement with Fortress Investment Group to boost its loan platform business. This significant boost in capital pushed SoFi’s stock higher, with investors responding positively to the potential for expanded growth in its financial services offerings.
  • Sirius XM Surges After Berkshire Hathaway Buys More Shares: Sirius XM Holdings saw its stock rise by 7.9% after Berkshire Hathaway disclosed that it increased its position in the company. Warren Buffett’s firm added roughly 3.6 million shares, bringing its total stake to over 108 million shares. This news sent the stock climbing as investors showed renewed confidence in the satellite radio company’s long-term outlook.
  • Crypto Stocks Rally as Bitcoin Crosses $66,000: Shares tied to cryptocurrencies soared on Monday, with Bitcoin surging more than 5% to surpass $66,000. Mara Holdings jumped 5.6%, and Coinbase rose by 11.3%, extending gains from the previous session as the bullish momentum in the crypto market continued to drive stock prices higher.
  • AppLovin Falls on Goldman Sachs Downgrade: AppLovin shares declined by over 1% after Goldman Sachs downgraded the stock from “buy” to “neutral,” citing a more balanced risk-to-reward ratio following its recent outperformance. The stock’s sharp rise in previous weeks has made it less attractive for new buyers, prompting the downgrade.
  • Boeing Slides on Workforce Reduction and Delays: Boeing’s stock dropped more than 1% after the company announced it would cut 10% of its workforce, equating to around 17,000 jobs. In addition to workforce reductions, Boeing postponed deliveries of its 777X wide-body plane, which has not yet been certified, and forecasted wider-than-expected losses for the third quarter amid ongoing strikes.
  • Flutter Entertainment Climbs After Analyst Upgrade: Flutter Entertainment rose over 4% after Wells Fargo upgraded the stock to “overweight” from “equal weight,” encouraging investors to buy the recent dip. Bank of America also reinstated coverage with a “buy” rating, contributing to the stock’s rally as analysts remain bullish on the parent company of FanDuel and its online gambling prospects.
  • Hims & Hers Health Jumps on FDA Announcement: Shares of Hims & Hers Health surged by more than 9% after the US Food and Drug Administration announced that compounding pharmacies can now sell versions of Eli Lilly’s weight loss drug, Mounjaro. This news boosted the stock as the company is well-positioned to benefit from demand for alternatives to the popular weight loss treatment.
  • Ibotta Rallies After Goldman Sachs Upgrade: Ibotta shares jumped more than 7% after Goldman Sachs upgraded the company to “buy” from “neutral,” highlighting growth opportunities through its partnerships with major retailers like Walmart and Instacart. Investors responded positively to the outlook for increased market share in the cashback rewards space.

As markets reached new milestones, with the Dow breaking the 43,000 barrier and the S&P 500 hitting another all-time high, investors remain cautiously optimistic ahead of key corporate earnings reports. Tech stocks continued their upward trajectory, with Nvidia leading the charge, while gains in SoFi Technologies and Sirius XM reflected positive investor sentiment across various sectors. Despite the bullish tone, concerns over rising Treasury yields and geopolitical risks persist, adding a layer of uncertainty to the market’s outlook. Meanwhile, oil prices slid as OPEC revised down its demand forecast for 2024, and Boeing faced headwinds with workforce reductions and delivery delays. As earnings season ramps up, the market will look to upcoming reports for further direction, with volatility likely to remain a factor in the coming weeks.