US Markets Start Week Strong on Rate Cut Optimism
American stock markets opened with significant gains on Monday as growing expectations of a December interest rate cut from the Federal Reserve boosted investor sentiment at the beginning of a holiday-shortened trading week. The positive momentum extended Friday's recovery, setting an optimistic tone despite some individual stock setbacks.
The S&P 500 index advanced 0.7 percent, building on Friday's rebound, while the Dow Jones Industrial Average gained 138 points. The technology-heavy Nasdaq Composite showed even stronger performance, climbing 1.1 percent according to AP reports.
Mixed Corporate News and Market Resilience
The early market uptick occurred despite a sharp decline in US-listed shares of pharmaceutical giant Novo Nordisk. The drug manufacturer announced that its Alzheimer's disease candidate failed to slow disease progression in a clinical trial, sending its stock downward.
However, this negative corporate news was overshadowed by rising confidence among investors that the Federal Reserve may ease monetary policy at its next meeting. The rally reflects shifting market focus from last week's volatility in artificial intelligence and Nvidia-driven trades to the underlying strength of the US consumer as the peak holiday shopping season approaches.
Holiday Schedule and Global Market Impact
US markets will remain closed on Thursday for Thanksgiving and will resume for a shorter trading session on Friday, coinciding with Black Friday and Cyber Monday shopping activity. This compressed trading week typically sees lower volumes but can experience heightened volatility.
Futures trading earlier in the day had pointed to a positive opening, with S&P 500 contracts up 0.5 percent and Nasdaq futures rising 0.7 percent. Stephen Innes of SPI Asset Management noted that scarce macroeconomic data during what he called the "six-week government shutdown" has made investors particularly sensitive to retail and spending indicators.
"In a data desert, even a puddle looks like a lake," Innes observed, emphasizing the importance of monitoring foot-traffic and transaction trends during this period.
Global markets showed mixed but generally positive performance. In Europe, Germany's DAX traded 0.5 percent higher by midday, while Britain's FTSE 100 added 0.3 percent. France's CAC 40 remained relatively flat. Asian markets presented a varied picture, with Hong Kong's Hang Seng rising 2 percent on gains in Alibaba, and Shanghai's Composite posting marginal gains. Japanese markets were closed for a holiday.
Oil prices saw modest increases, with US benchmark crude reaching $58.17 per barrel and Brent crude trading at $62.06. The previous trading session on Friday had seen substantial gains across major indices, with the S&P 500 rising 1 percent, the Dow adding 1.1 percent, and the Nasdaq gaining 0.9 percent. These advances left the benchmark index just over 4 percent below its all-time high, even as volatility marked its sharpest intraday swings since April.
