During midday trading on Monday, U.S. stocks attempted to recover from the significant losses experienced on Friday. The bond market, however, continued to decline as Treasury yields reached levels not seen in over a decade across various maturities. The energy sector remained strong, driven by oil companies taking advantage of crude prices that have stayed around $90 per barrel. At the same time, the U.S. dollar reached its highest point in the past 10 months, fueled by the Federal Reserve’s hawkish stance and the weakening economic outlook in Europe.
In terms of the market performance on Monday, the S&P 500 rose by 0.4% following a decline of 1.6% on Friday and nearly 3% drop last week. The Nasdaq 100 also gained 0.4%, recovering from a 3.6% decline last week. On the other hand, the Dow Jones Industrial Average remained flat, while small caps in the Russell 2000 soared 0.6% after experiencing a 3.8% decline last week.
LPL Financial’s Chief Technical Strategist, Adam Turnquist, noted that the S&P 500 has suffered damage technically and has broken below a symmetrical triangle formation. He highlighted downside support levels and mentioned that despite the recent pullback, there are no major signs of a sustainable flight to safety. He stated that pullbacks are normal within a bull market, and while the rise in interest rates is concerning, the S&P 500 remains in an uptrend and above its rising 200-day moving average.
In terms of specific stocks, studios such as Walt Disney, Paramount Global, and Warner Bros. Discovery saw their stocks fall after the writers union reached a preliminary labor agreement with major studios. AMC Entertainment Holdings, on the other hand, rose by 9% as the CEO expressed a positive outlook for movie theaters following the deal. Steel Dynamics had the largest gains in the S&P 500, rising 3.2%, as Citigroup raised the company’s price target. Amazon rose by 1.8% after announcing its investment of up to $4 billion in AI startup Anthropic.
In the commodities market, crude oil slightly decreased, and Treasury yields rose sharply. The U.S. dollar strengthened, while European equity indices had a negative session. Gold and silver prices declined, while Bitcoin experienced a slight increase.
Overall, the market showed signs of attempted recovery after recent losses, but there are concerns about technical damage and rising interest rates.
