Wall Street kicked off the week with enthusiasm as hope grew for the possible end of the 20-day federal government shutdown. Kevin Hassett told that he expects the shutdown to “likely end sometime this week” and that the Trump administration would implement new punitive measures if Senate Democrats continue their opposition. Traders are hopeful that the recent earnings reports will highlight strong corporate growth, despite the prevailing economic uncertainty. Source reports that around 86% of companies in the S&P 500 that have reported this quarter have exceeded expectations.
The Dow closed higher by 516 points on Monday, or 1.12%, partly fueled by shares of Apple, which gained 3.94% and reached their first record high of the year following a report indicating strong sales of the iPhone 17 model in the United States and China. The iPhone Air sold out in China just minutes after its launch, according to the South China Morning Post. The S&P 500 saw a rise of 1.07%, while the tech-heavy Nasdaq gained 1.37%. Fear gauge, the VIX, dropped 12%, signaling renewed investor confidence.
Earlier this month, markets faced a notable drop after President Donald Trump cautioned about a major rise in tariffs on China. This followed China’s cut in exports of rare earth minerals, crucial for electronics manufacturing. The Dow experienced a significant decline of almost 900 points on October 10, fueled by worries regarding a possible intensification of the trade conflict between the two largest economies globally. However, Trump has since taken back those threats, recognizing that imposing massive tariffs on China is not a practical long-term solution.
Investors are now shifting their attention to major technology companies. “The stock market’s next significant challenge may come from the earnings reports of these tech giants towards the end of October and into November, as investors seek greater insight into how investments in artificial intelligence are translating into profits,” stated Rick Gardner. The group of stocks known as the Magnificent Seven — Meta, Amazon, Tesla, Nvidia, Microsoft, Alphabet, and Apple — has contributed to 41% of the S&P’s gains this year, according to Howard Silverblatt. Several companies from the Mag Seven group are set to reveal their third-quarter earnings this month. On Monday, gold and silver futures saw notable rises of 4.3% and 3.3%, respectively, as investors continued to seek safe havens amidst ongoing uncertainty.