U.S. benchmark stock indices ended higher on Monday, with the S&P 500 rising 0.7% and pulling back within 1% of its all-time high, marking continued momentum from the previous session's record-breaking performance. The Nasdaq composite surged 1.1% while the Dow Jones Industrial Average rose 155 points (0.3%) to a fresh record high, according to Business Standard. The Russell 2000, which tracks stocks with small market capitalization, rose nearly 1%, while retail sentiment on Stocktwits for SPY, QQQ and DIA was all in the "extremely bullish" territory with "extremely high" message volumes. According to Bloomberg, veteran strategist Louis Navellier noted that "Tech continues to dominate the market" with the trend remaining positive, though he cautioned that further material gains could be possible with a resolution to Middle East tensions.
AI-driven gains lifted the U.S. market on Monday, with the sector continuing to outweigh uncertainty around the US-Iran war, as reported by Business Standard. Broadcom rose 3.7% after announcing long-term agreements to provide silicon products to Apple, coming off two straight losses of more than 2% at the end of last week. TeraWulf climbed 4.9% after it said Anthropic agreed to a 20-year deal to use its data center in Kentucky, with the company expecting the deal to bring in roughly $19 billion in revenue while transitioning its business away from mining bitcoin into high-performance computing. The VanEck Semiconductor ETF (SMH) jumped 4.2%, while Microsoft (MSFT) and Nvidia Corp. announced a sweeping hardware and software partnership to deploy advanced artificial intelligence agents across local Windows devices and cloud infrastructure. As Reuters notes, the market is entering earnings season with plenty of hope already priced in, making the next test whether the numbers can still carry the weight.
Oil prices drifted after OPEC+ announced Sunday that seven of its members plan to expand oil production by a combined total of 188,000 barrels per day in August, marking the fifth straight month that OPEC+ members have agreed to raise output, according to Business Standard. The price of a barrel of Brent crude, the international standard, fell 0.2% to $71.99, which is close to where it was before the United States and Israel attacked Iran in late February and sent prices spiking. A report showed that growth last month for U.S. recreation, finance and other services businesses was roughly in line with economists expectations, with the survey by the Institute for Supply Management noting that some businesses said they were seeing lower prices for gasoline and diesel, easing inflationary pressures.
Wednesday's Federal Reserve minutes are positioned as the week's main policy event, with forward guidance now largely removed from the Fed's toolkit, as reported by Investing.com India. The softer jobs report has eased immediate fears of September rate hikes, as traders had been increasingly inclined to expect the Fed's next move would be higher rather than a pause at current levels. Investors will be looking for clues on inflation impact of energy prices, degree of concern about demand, and whether the committee is genuinely prepared to tighten further. The new Fed regime resembles an old casino table where markets must read every twitch of the hand rather than being told where the storm is heading. The immediate relief came from a cooler jobs report, which took some of the heat off September rate-hike pricing, though the broader valuation question remains.
The ongoing war in the Middle East continued to behave as an overhang on investor sentiment amid ongoing talks between Lebanon and Israel and Iran yet to comment on U.S. peace deal, according to Bloomberg. President Donald Trump denied reports that communications between the United States and Iran had stalled, calling the claims "fake news" in a post on Truth Social on Tuesday. Trump said discussions between the two countries have continued uninterrupted in recent days, disputing reports that talks had been suspended. United States Secretary of State Marco Rubio says the US will not remove sanctions on Iran in exchange for a full reopening of the Strait of Hormuz, adding that any sanctions relief is conditioned on Iran giving up enriched uranium. The diplomatic uncertainty continues to provide a backdrop against which markets are navigating their current rally.
Delta Air Lines and PepsiCo report next week, offering early reads on consumer demand from different angles - travel demand and everyday household spending respectively, as reported by Investing.com India. The broader second-quarter earnings season picks up later in July, with LSEG IBES currently expecting S&P 500 earnings growth of more than 24%. This demanding bar requires companies to validate not only this year's earnings path but the belief that momentum can carry into 2027. The market needs earnings to continue supporting lofty valuations while sector rotation absorbs technology weakness. The broader question is whether rotation can broaden the rally without tech weakness pulling the market lower.
