Wall Street’s main indexes surged to fresh record highs for the second consecutive session on Monday, buoyed by renewed optimism over a potential U.S.-China trade agreement and anticipation of a pivotal week for corporate earnings and monetary policy.
Investors on Wall Street were encouraged by the prospect of a breakthrough in trade talks between U.S. President Donald Trump and Chinese President Xi Jinping, who are scheduled to meet on Thursday. The meeting is expected to yield a framework that could pause further U.S. tariffs and ease China’s rare-earth export restrictions, a move that helped push the CBOE Volatility Index (VIX)—Wall Street’s so-called “fear gauge”—to a one-month low.
Adding to the positive sentiment, U.S. Treasury Secretary Scott Bessent appeared on weekend television to discuss progress in trade negotiations, including China’s commitment to purchase U.S. soybeans and ease restrictions on rare-earth exports. These developments, following two days of talks in Malaysia, were seen as constructive steps toward de-escalating trade tensions. Scott Wren, senior global market strategist at Wells Fargo Investment Institute, noted that Bessent’s remarks helped reinforce investor confidence heading into the week.
The rally on Wall Street’s main tech companies also comes ahead of earnings reports from five of the “Magnificent Seven” megacap tech companies—Microsoft, Apple, Alphabet, Amazon, and Meta. These firms are expected to provide critical insight into whether the recent surge in capital expenditures on artificial intelligence is translating into meaningful revenue and profit growth. “The market wants confirmation that AI CapEx is translating into real revenue and profit growth,” Wren said, underscoring the importance of these earnings in sustaining the current rally.
Wall Street Indices Performance.
The Dow Jones Industrial Average climbed 337.47 points, or 0.71%, to close at 47,544.59. The S&P 500 gained 83.47 points, or 1.23%, to finish at 6,875.16—its first close above the 6,800 mark. Meanwhile, the Nasdaq Composite jumped 432.59 points, or 1.86%, to end the session at 23,637.46. Among the S&P 500’s 11 major sectors, communication services led the charge with a 2.3% gain, driven by a 3.6% rally in Alphabet shares. The technology sector rose 2%, closing at a new record high, while the Philadelphia Semiconductor Index advanced 2.7%.
Qualcomm delivered the day’s standout performance in tech, soaring 11% on Wall Street after unveiling two new AI chips for data centers, which are expected to be commercially available next year. Nvidia, a leader in AI chips, also gained 2.8%, providing the biggest boost to the S&P 500. The consumer discretionary sector rose 1.5%, with Tesla climbing 4.3% on optimism surrounding the U.S.-China talks. However, Christopher Brown, Vice President of Investments at Synovus, cautioned that Tesla’s valuation remains elevated, even under the most favorable trade outcomes.
Not all sectors participated in the rally. Consumer staples slipped 0.27%, while materials declined 0.25%. Rare-earth miners, which had previously benefited from fears of supply disruptions, saw sharp declines as trade tensions eased. Shares of Critical Metals fell 13.7%, NioCorp Developments dropped 11.5%, and Ramaco Resources declined 2.6%.
U.S.-listed Chinese companies also rallied on the back of trade optimism. Alibaba, JD.com, and PDD Holdings each rose between 2.7% and 3%, while Baidu surged 4.8%. Meanwhile, Keurig Dr Pepper jumped 7.6% after raising its annual sales forecast and securing $7 billion to finance its acquisition of Dutch coffee giant JDE Peet’s. Lululemon gained 1.8% following the announcement of a partnership with the National Football League. Janus Henderson shares surged 11.3% after confirming an acquisition proposal from Trian and General Catalyst.
Argentine stocks listed on Wall Street posted outsized gains following President Javier Milei’s election victory. YPF rose 23.8%, Grupo Supervielle surged 48%, Banco Macro climbed 37.6%, Grupo Financiero Galicia advanced 38.7%, and Banco BBVA Argentina jumped 40.8%, reflecting investor enthusiasm for the new administration’s market-friendly stance.
Market breadth was positive on Wall Street, with advancing issues outnumbering decliners by a 1.74-to-1 ratio on the NYSE, where 659 stocks hit new highs and 69 posted new lows. On the Nasdaq, 2,593 stocks advanced while 2,145 declined, yielding a 1.21-to-1 ratio. The S&P 500 recorded 37 new 52-week highs and three new lows, while the Nasdaq Composite logged 132 new highs and 57 new lows. Total volume on U.S. exchanges reached 19.76 billion shares, slightly below the 20-day average of 20.85 billion.
Investors on Wall Street will continue to stay watch, with the Federal Reserve’s policy decision on Wednesday. With inflation data cooling, markets have fully priced in a 25-basis-point rate cut. Attention will turn to Fed Chair Jerome Powell’s comments for signals on whether another cut could follow in December, especially as a potential U.S. government shutdown continues to delay key economic data releases.
Also Read: Oil Prices Edge Higher as U.S.-China Trade Framework Eases Market Tensions
