FX.co ★ Nasdaq, S&P 500 Reach New Record Closing Highs

Stocks initially showed little movement at the start of Monday's session but gained significant ground throughout the day. Major indices moved upward, with the Nasdaq and the S&P 500 achieving record closing highs.

The major averages retreated slightly from their peak levels by the close but still finished solidly in positive territory. The Nasdaq surged 168.14 points or 1.0% to close at 17,857.02, the S&P 500 advanced 41.63 points or 0.8% to 5,473.23, and the Dow climbed 188.94 points or 0.5% to 38,778.10.

Initially, traders were hesitant to make significant moves, taking time to assess recent market activity and the short-term outlook. However, buying interest emerged as the session progressed, possibly fueled by the positive sentiment from the previous week.

Last week, surprisingly tame inflation data led to substantial gains in the Nasdaq and the S&P 500, though the narrower Dow did not follow this uptrend. Despite Federal Reserve officials predicting only one interest rate cut this year following last Wednesday's monetary policy meeting, traders remain hopeful that these forecasts may prove too conservative if inflation continues to decelerate in the coming months.

Traders are also anticipating key economic data releases this week, with reports on retail sales and industrial production likely capturing significant attention.

On the U.S. economic front, the Federal Reserve Bank of New York released a report indicating that New York manufacturing activity contracted at a notably slower rate in June. The New York Fed's general business conditions index rose to -6.0 in June from -15.6 in May, although a negative reading still signifies contraction. Economists had expected the index to rise to -9.0.

Despite the ongoing contraction in current activity, the New York Fed noted that optimism about the six-month outlook increased to its highest level in over two years.

**Sector News**

Oil service stocks surged alongside crude oil prices, with the Philadelphia Oil Service Index jumping by 2.1% after ending last Friday at a four-month closing low. Significant strength was also seen in computer hardware stocks, as evidenced by the 2.0% rise in the NYSE Arca Computer Hardware Index. Additionally, airline stocks made a notable move upward, driving the NYSE Arca Airline Index up by 1.7%.

Semiconductor, banking, and software stocks also exhibited notable strength, while utilities and telecom stocks lagged behind.

**Other Markets**

In overseas trading, stock markets across the Asia-Pacific region mostly declined on Monday. Japan's Nikkei 225 Index fell by 1.8%, while China's Shanghai Composite Index decreased by 0.6%.

European markets showed mixed performance. The U.K.'s FTSE 100 Index edged down by 0.1%, while Germany's DAX Index rose by 0.4%, and France's CAC 40 Index advanced by 0.9%.

In the bond market, treasuries lost ground after trending higher over the previous sessions. Consequently, the yield on the benchmark ten-year note, which moves inversely to its price, increased by 6.6 basis points to 4.279%.

**Looking Ahead**

Tuesday's trading may be influenced by reactions to U.S. economic reports on retail sales and industrial production.