Wall Street closed higher on Monday, driven by tech and financial stocks. Investors largely overlooked concerns about a possible government shutdown and shrugged off hawkish signals from Fed officials. All three benchmark indexes finished in the green.
The Dow Jones Industrial Average (DJI) climbed 0.2%, or 68.78 points, to close at 46,316.07. Twenty components of the 30-stock index ended in positive territory, while 10 ended in negative.
The tech-heavy Nasdaq Composite added 107.09 points, or 0.5%, to close at 22,591.15.
The S&P 500 gained 17.51 points, or 0.3%, to close at 6,661.21. Ten of the 11 broad sectors of the benchmark index closed in the green. The Technology Select Sector SPDR (XLK), the Financials Select Sector SPDR (XLF) and the Consumer Discretionary Select Sector SPDR (XLY) advanced 0.5%, 0.5% and 0.4%, respectively, while the Energy Select Sector SPDR (XLE) fell 1.8%.
The fear gauge CBOE Volatility Index (VIX) increased 5.4% to 16.12. A total of 17.91 billion shares were traded on Monday, lower than the last 20-session average of 18.25 billion. Advancers outnumbered decliners by a 1.38-to-1 ratio on the NYSE and by 1.19-to-1 on the Nasdaq.
Market sentiment held firm despite the prospect of a potential U.S. government shutdown later this week. Historically, such political standoffs have rattled investor confidence, but traders appeared more focused on growth prospects in the technology sector. The Nasdaq outperformed as demand surged for mega-cap technology stocks, a segment that has often buoyed the market during periods of volatility. The S&P 500 also notched gains, while the Dow Jones Industrial Average closed modestly higher, reflecting more cautious moves among industrial and value-oriented names.
The session’s rally underscored resilience in market sentiment, with investors seemingly choosing optimism over caution at the start of the final quarter. Still, uncertainty around fiscal negotiations and monetary policy lingers, leaving Wall Street poised for heightened volatility in the days ahead.
Beth Hammack and Alberto Musalem, two Fed officials who adopted a hawkish stance on Monday, emphasized that interest rates may need to stay higher for longer to contain inflation. Despite the cautious signals, equity markets reacted resiliently, and investors continued to bet on at least one more rate cut in 2025. Traders are currently pricing in an 89% chance of a 25-basis-point rate cut at the next Fed meeting, per the CME’s FedWatch Tool.
