Stocks rose mostly higher on Monday as market participants were encouraged by positive updates to ongoing trade negotiations between the United States and China. Investors are also looking ahead towards the Federal Reserve's upcoming policy meeting later this week.
The S&P 500 Index (NYSE: SPY) rose about 0.5% to settle above 6,600 for the first time on Monday, while the tech-heavy Nasdaq Composite (NASDAQ: QQQ) jumped nearly 1% to its sixth straight record close at 22,348.75. The Dow Jones Industrial Average (NYSE: DIA), meanwhile, ticked 50 points higher to settle at 45,883.45 as traders continued to flood into growth stocks.
The session's gains come after the recent string of economic data signaled a weakening labor market and tame inflationary pressures, boosting sentiment that the central bank will issue its first interest rate cut since December at the conclusion of its September two-day meeting on Wednesday. The broader market is expecting at least a quarter percentage point reduction, according to CME Group's FedWatch tool.
Driving markets higher, trade officials from Washington D.C. and Beijing met for a second round of trade talks in Madrid, Spain on Monday, discussing key points including tariff rates, export restrictions, and the upcoming deadline for TikTok's U.S. business to either divest or face a nationwide ban on Wednesday.
Shares of Oracle (NYSE: ORCL) rose higher on Monday after President Donald Trump wrote in a post on his social media platform Truth Social that a deal was "reached on a 'certain' company that young people in our Country very much wanted to save," potentially referring to TikTok and the software giant's bid to manage the company's U.S. operations.
Also in the spotlight, Tesla (NASDAQ: TSLA) shares jumped on Monday after CEO Elon Musk disclosed Monday his purchase of 2.57 million shares of the electric vehicle maker valued at about $1 billion, his largest open market buy on record. Investors took this move as a major vote of confidence in the company's future, which is expected to focus more on autonomous driving, artificial intelligence and robotics.
The purchase also came about a week after Tesla's board proposed a new 10-year compensation package for Musk worth almost $1 trillion, outlining aggressive goals for the company's emerging robotaxi and Optimus humanoid robot units.
On the economic front, factory activity in the key New York region sharply declined in September as new orders and shipments both dropped, the Federal Reserve reported Monday.
The New York Fed's Empire State Manufacturing index fell 21 points to a reading of -8.7 in September, coming in well below the 4.5% reading expected by economists polled by Dow Jones and marking the first negative print since June. Readings below zero also represent construction in a sector. Driving the decline, the regional central bank's new orders index plunged 35 points in September, while the month's shipment's index also fell 30 points.
In the news, Trump wrote in a Truth Social post on Monday that he wants American companies to only be required to report financial results every six months, moving away from the current quarterly report cycle. The president said the idea is "Subject to SEC Approval" and would "save money, and allow managers to focus on properly running their companies."
"Did you ever hear the statement that, 'China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???' Not good!!!," Trump added. Regulations can only be changed by the Securities and Exchange Commission (SEC) or could be altered by Congress.
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) became the fourth company to be valued at $3 trillion on Monday, joining its mega-cap peers Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA). The stock has built up momentum recently after a federal court rejected the Department of Justice's antitrust proposal to force Google to sell its Chrome browser and Android operating system earlier this month. The stock is currently up more than 32% year-to-date.
For Tuesday, investors will react to fresh data on U.S. retail sales and home builder confidence for August as the Fed kicks off its two-day policy meeting.