What’s happening: The Dow Jones index recorded its best one-day spike in around three weeks on Monday.
What happened: With investors concerned about rising coronavirus cases in various states in the US, the Dow had booked a decline of 3.3% last week.
Wall Street kicked off this week with a strong rally in indices trading, with investor sentiment boosted by upbeat economic data and hopes of an additional stimulus package to support an economic rebound. The upturn in Boeing’s shares helped the blue-chip Dow Jones index record sharp gains on Monday.
Why it matters: US economic reports continued to surprise the markets, despite various states witnessing a surge in covid-19 cases and re-imposing some restrictions on businesses.
The National Association of Realtors reported on Monday that pending home sales had jumped 44.3% in May. This was significantly higher than the expectations of a 15% gain in sales.
Shares of Boeing spiked more than 14% yesterday, after US air safety regulators announced the resumption of key flight tests of the company’s 737 Max from a Seattle airport.
Coty’s shares climbed around 13% after the company agreed to purchase a 20% stake in Kim Kardashian West’s beauty brand.
Investors shrugged off news of rising covid-19 cases, which have crossed 10 million globally and resulted in over half a million deaths. Several states, including Texas, Florida, and Arizona, have been forced to roll back their reopening plans to curb further spread of the pandemic.
Investors focused on the possibility of additional stimulus measures from the Federal Reserve to help the economy recover from the coronavirus crisis.
The Dow Jones index jumped 580 points to close at 25,595.80 on Monday, recording its best single-day percentage rise since June 5. The S&P 500 rose 1.5% to settle at 3,053.24, backed by a rise in industrial and consumer discretionary shares.
The Nasdaq also added 1.2% to close at 9,874.15 in the previous session, following a 1.9% decline last week.
US stocks traded at elevated levels yesterday, despite which the greenback edged higher, sending the US dollar index, which measures the dollar’s performance versus a basket of foreign currencies, higher by 0.1%.
What to watch: Traders await a basket of economic reports from the US, including the S&P CoreLogic Case-Shiller home price index, Chicago PMI and consumer confidence index. The S&P CoreLogic Case-Shiller home price index, which rose 3.9% in March, is expected to climb another 4% in April. The Chicago PMI is projected to surge to 45 in June, from 32.3 in May. The Conference Board’s consumer confidence index is likely to rise to 91.8 in June, versus May’s reading of 86.6.
Markets will also continue to keep an eye on daily coronavirus cases, with the US reporting almost 2.6 million cases, with more than 126,000 deaths.