Wall Street’s main indexes rose on Monday to one-week highs as optimism around AI boosted semiconductor stocks, and a report suggested the incoming Trump administration could adopt a less aggressive stance on tariffs than previously anticipated.
At 12:03 p.m. ET, the Dow Jones Industrial Average rose 353.08 points, or 0.83%, to 43,085.21, the S&P 500 gained 74.43 points, or 1.25%, to 6,016.90 and the Nasdaq Composite gained 343.99 points, or 1.75%, to 19,965.67.
Automakers rose, with Ford up 1.6% and General Motors gaining 4% after a report said President-elect Donald Trump’s incoming administration is currently focused on imposing universal tariffs, but only on certain sectors deemed critical to national or economic security. However, Trump later refuted the report.
Automobile manufacturers are considered the most vulnerable to tariffs imposed on trade partners of the U.S., given their vast supply chains.
In the lead-up to Trump’s inauguration on Jan. 20, investors are seeking insights into his policies, which are broadly seen as beneficial for corporate America as well as the U.S. economy.
The Russell 2000 index, tracking domestically focused small-cap companies, rose 0.9%.
“If we’ve learned anything over the years, it’s that Trump is unpredictable. He loves shaking up markets, but the final outcomes are often less dramatic than his initial announcements,” ING analysts led by Chris Turner said in a note.
“However, officials and companies shouldn’t get too comfortable. We will only know what’s truly happening once it’s done.”
Eight out of the 11 S&P 500 sectors advanced with tech stocks leading gains, up 2%.
Chipmakers got a boost from Microsoft’s plan to invest $80 billion to develop artificial-intelligence-enabled data centers, as well as Foxconn’s forecast-beating fourth-quarter revenue.
Nvidia gained 4.5%, Advanced Micro Devices added 3.7% and Micron Technology climbed 11.6%. The Philadelphia SE Semiconductor index jumped 3.7% to hit a two-month high.
U.S. stocks rebounded sharply on Friday after a string of losses in December and the first few sessions of the new year, when concerns about high valuations, rising Treasury yields and thin liquidity saw traders pull back after a strong 2024 run.
In a week packed with economic data and speeches from U.S. Federal Reserve officials, investors will look for clues on the pace of monetary policy easing this year. Later in the week, the focus will be on a key monthly payrolls report.
While Trump’s proposals could boost corporate profits and energize the economy, they also run the risk of placing upward pressure on inflation. Fed Governor Lisa Cook was the latest among a number of policymakers to caution that inflation risks remain in the new year.
Citigroup added 3.8% after a bullish rating from Barclays. An index tracking banks rose 1.7%. Fed Vice Chair for Supervision Michael Barr, who has sought a range of strict rules on the nation’s biggest banks, said he’ll resign.
Markets will be shut on Thursday, Jan. 9, on account of a national day of mourning to mark the death of former President Jimmy Carter.
Advancing issues outnumbered decliners by a 1.84-to-1 ratio on the NYSE and by a 1.92-to-1 ratio on the Nasdaq.
The S&P 500 posted eight new 52-week highs and five new lows, while the Nasdaq Composite recorded 86 new highs and 21 new lows.
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