4:13pm: Nvidia boosts Nasdaq ahead of CES speech
US stocks closed mixed on Monday, with technology and semiconductor shares leading gains while the Dow Jones edged lower.
The S&P 500 advanced 0.6% to close at 5,975, gaining 33 points. The tech-heavy Nasdaq Composite surged 1.3%, adding 246 points to finish at 19,868, buoyed by strong performances in chip stocks. In contrast, the Dow Jones slipped 0.1%, shedding 26 points to end the session at 42,707.
The rally in technology stocks was primarily driven by semiconductor companies, with Nvidia leading the charge ahead of CEO Jensen Huang's keynote speech at CES this afternoon.
3:30pm: Investors shift to tech stocks
The Dow Jones turned negative by Monday afternoon, slipping 0.1% as investors rotate out of traditional blue-chip stocks and into growth-oriented tech stocks.
This performance comes in the context of a mixed market, with the S&P 500 up 0.5% and the Nasdaq advancing 1.2% prior to Monday’s closing bell.
2:25pm: Palantir flagged for growth potential
Shares of Palantir Technologies Inc (NYSE:PLTR) (Palantir Technologies Inc (NYSE:PLTR)) dropped more than 5% on Monday after Morgan Stanley (NYSE:MS) (Morgan Stanley (NYSE:MS)) analysts initiated coverage with an 'Underweight' rating and a $60 price target.
Analysts cited concerns about the stock’s valuation and limited near-term growth potential despite its 340% surge in 2024, which Morgan Stanley (NYSE:MS) noted was driven primarily by multiple expansion rather than substantial revenue gains.
1:10pm: Chip stocks surge
Markets were continuing their strong start on Monday, with technology and chip stocks leading the charge.
The major indices are showing impressive midday gains: the Dow Jones Industrial Average is up 0.4%, continuing its positive momentum; the S&P 500 is surging 0.9%, nearing new record highs; and the Nasdaq is climbing 1.4%, driven largely by semiconductor stocks.
Chip stocks are rallying on renewed hopes for artificial intelligence, with companies like Nvidia and Taiwan Semiconductor rising over 5%.
12:15pm: A look at the week ahead
This week, investors are focusing on a busy schedule of economic data releases and Federal Reserve commentary, despite a market pause on Thursday for the National Day of Mourning in honor of former President Jimmy Carter.
The key event is Friday’s nonfarm payrolls report, with Deutsche Bank forecasting a moderation in payroll growth after November's rebound, estimating a gain of 150,000 in headline payrolls and 125,000 in private payrolls, along with a slight increase in the unemployment rate to 4.3%.
Key data points include Monday’s factory orders, Tuesday’s trade balance, and labor market indicators such as the JOLTS report, the ISM services report, and the ADP employment survey.
11:35am: Canadian PM Trudeau to resign as party leader
Canadian Prime Minister Justin Trudeau has announced plans to resign as leader of the nation’s Liberal Party.
Trudeau will remain Prime Minister until the Liberal Party selects a new leader through a “robust, nationwide, competitive process,” he told reporters at a news conference outside Rideau Cottage on Monday.
He also met with Governor General Mary Simon and requested the prorogation of Parliament until March 24, effectively pausing legislative activities.
11.05am: Today's Fed speaker: Lisa Cook
Today's Fed speak was courtesy of governor Lisa Cook, who said the US central bank is able to "proceed more cautiously" with further rate cuts.
This is because the labor market has been "somewhat more resilient, while inflation has been stickier" than she and others assumed when they made three rate cuts last year.
Current expectations are that the Fed's main policy rate will be held at the current range at the next meeting at the last week of of the month.
In a speech to the University of Michigan Law School, Cook said: "Over time, I still think it will likely be appropriate to move the policy rate toward a more neutral stance."
However the cuts made so far have "notably reduced the restrictiveness of monetary policy", and the US economy is moving into 2025 "in good shape".
She sees inflation "gradually — if unevenly — returning over time to our goal of 2% in a sustainable manner."
Cook said the growth in private lending could be a source of shocks to the overall financial system in a crisis, while the increased use of AI tools could also be a source of risk.
10.46am: Welcome to Trump 2.0
The dollar has bounced back after Donald Trump refuted the Washington Post report that his new Trump administration may be more selective in its use of tariffs than first thought.
Fake news - possibly the first of many on his return to the White House - as the President Elect said the facts were wrong.
"As our traders say: welcome to the age of Trump 2.0," says Chris Turner at ING.
"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. However, officials and companies shouldn’t get too comfortable. We will only know what’s truly happening once it’s done."
10.10am: Microsoft AI comments
Microsoft's vice chair Brad Smith made the $80 billion data centre investment statement on Friday, which is why semiconductor stocks are leading the way this morning.
He said none of America's nor Microsoft's strength in artificial intelligence would be possible without "partnerships founded on large-scale infrastructure investments that serve as the essential foundation of AI innovation and use".
For 2025, he said Microsoft is "on track" to invest approximately $80 billion to build out AI-enabled datacenters to train AI models and deploy AI and cloud-based applications around the world.
"More than half of this total investment will be in the United States, reflecting our commitment to this country and our confidence in the American economy."
9.53am: Wall Street opens higher
US stocks have opened higher, with the Nasdaq out in front as expected.
The tech-powered Nasdaq Composite index has leapt 1.5% in early trades, with the S&P 500 rising 1%.
Smaller rises have been seen for the Dow Jones, climbing 0.4%, and the small- and mid-cap Russell 2000, which has added 0.5%.
Gains are being driven by semiconductor stocks, with Nvidia, Broadcom and AMD up 3.1%, and ASML rising 5.6%, while other 'Mag 7' stocks including Alphabet and Microsoft, Meta and Tesla are up between 1% and 3%.
Tech stocks are being helped by Microsoft saying that it will commit $80 billion in capex to build AI data centres this year.
"After a shaky start, risk is back on at the start of this week," says market analyst Kathleen Brooks at XTB.
"The recent sell off in tech stocks has also removed some of the froth in the market that built up last year, which may also entice investors who want a slice of the action at a cheaper price," adds Brooks.
6.30am: Nasdaq to lead Wall Street gains on Monday
Nasdaq tech stocks are expected to lead Wall Street higher when the first full week of 2025 trading begins later on Monday.
Futures for the Nasdaq 100 were pointing to a 1% gain, while S&P 500 futures were up 0.7% and Dow Jones futures were indicating a 0.3% increase.
This would add to a strong finish to last week, when the Nasdaq Composite added 1.8%, the S&P 1.3% and the Dow 0.8%.
Stock futures and shares in Europe have been boosted in the past hour by reports from the Washington Post that President-elect Donald Trump's team are thinking of more targeted measures rather than the "universal tariffs" that had been threatened.
Trump's aides are "exploring tariff plans that would be applied to every country but only cover critical imports", the paper reported, which would be a shift from the plans mooted by the returning president in his election campaign.
On the stump, Trump had called for "universal" tariffs of 10% or 20% on all goods imported into the US, which economists and other Republican politicians have warned could rock the global economy and lead to more inflation.
Elsewhere, traders will have data on the services sector and factory orders, as well as a speech from Federal Reserve board member Lisa Cook to mull over during the morning.