US stocks rally toward more records ahead of pivotal week for Wall Street
U.S. stocks pushed toward fresh records Monday as investors braced for a packed week of events that could set the tone for markets. Shortly after the opening bell, the S&P 500 rose about 0.8%, the Dow Jones Industrial Average added roughly 210 points (0.4%), and the Nasdaq composite gained 1.3%, extending record highs set on Friday.
Optimism also spilled over from Asia, where markets rallied ahead of a planned meeting later in the week between U.S. and Chinese leaders. Hopes are building that talks could ease tensions between the world’s two largest economies and support global growth.
Why this week matters
For the market’s powerful rally to continue— the S&P 500 has surged roughly 37% since its April low—several things need to fall into place. Investors are counting on progress in U.S.-China dialogue, continued support from the Federal Reserve, and resilient corporate earnings. The combination of these forces has underpinned risk appetite, even as concerns about valuations and pockets of speculation persist.
Fed watch: Rates, inflation, and data uncertainty
The Federal Reserve takes center stage on Wednesday with its latest policy decision. Traders largely expect another quarter-point cut to the federal funds rate as policymakers try to cushion a cooling labor market and sustain economic momentum. Lower rates generally support stock prices by reducing borrowing costs and boosting the relative appeal of equities.
But the path is not guaranteed. The Fed has signaled it could adjust course if inflation accelerates beyond already elevated levels, since lower interest rates can add pressure to prices. The latest monthly inflation reading was slightly more favorable than anticipated, which helped sentiment, though a prolonged government shutdown could delay incoming data and cloud the outlook for future policy moves.
Earnings in focus: From consumer staples to Big Tech
Corporate profits remain a crucial pillar for stocks. Keurig Dr Pepper climbed about 4.9% after reporting quarterly earnings that met Wall Street expectations, citing benefits from higher pricing on K-Cup products, among other factors.
Attention now shifts to some of the market’s most influential names. Alphabet, Meta Platforms, and Microsoft are slated to report results on Wednesday, followed by Amazon and Apple on Thursday. With heavy investment flowing into artificial intelligence, these companies will be pressed to show robust growth that justifies rising costs and lofty valuations. At the same time, concerns have been mounting that AI enthusiasm could be echoing the excesses of prior bubbles, raising the stakes for this earnings season.
Global markets and bonds
Overseas, European indexes were mixed after Asia posted solid gains. Shanghai rose around 1.2% and Hong Kong added roughly 1.0%. Japan’s Nikkei 225 jumped about 2.5%, while South Korea’s Kospi rallied approximately 2.6%, reflecting improved risk appetite ahead of the high-level U.S.-China meeting.
In the bond market, the 10-year U.S. Treasury yield held steady near 4.02%, in line with late Friday levels. Stable yields can provide a supportive backdrop for equities by keeping borrowing costs contained and offering investors clearer visibility on discount rates used to value future earnings.
The bottom line
Wall Street’s rally is entering a critical stretch. Constructive U.S.-China dialogue, a supportive Fed, and solid tech-led earnings could extend the market’s upward momentum. But elevated inflation, data uncertainty, and questions about the durability of AI-driven growth remain potential speed bumps. With so many catalysts converging this week, volatility—and opportunity—are both back in focus.
