NEW YORK: Wall Street’s main indexes notched record highs on Monday as excitement around a potential US-China trade deal set the tone for a week packed with Big Tech earnings and a widely expected interest rate cut.
Earnings from “Magnificent Seven” members Microsoft, Apple, Alphabet, Amazon, and Meta later this week will test the endurance of the AI rally. The five megacaps gained between 1 percent and 3 percent.
President Donald Trump and China’s Xi Jinping will meet on Thursday to decide on a framework that could pause tougher US tariffs and China’s rare-earth export curbs, easing market jitters around a trade war and sending Wall Street’s “fear gauge” VIX down to a one-month low.
US-listed shares of Chinese companies gained on Monday. Alibaba Group Holding, JD.com and PDD Holdings rose more than 2 percent each, while Baidu added 4.8 percent.
“Markets just want to be positive. Investors want a reason to buy and they see that reason in whether it’s lower rates, trade deals, decent earnings or the continued dominance of the AI trade,” said Melissa Brown, managing director of investment decision research at SimCorp.
At 11:21 a.m. ET, the Dow Jones Industrial Average rose 199.11 points, or 0.42 percent, to 47,406.23, the S&P 500 gained 60.43 points, or 0.89 percent, to 6,852.12 and the Nasdaq Composite gained 353.95 points, or 1.54 percent, to 23,560.95.
Qualcomm surged 15 percent after unveiling two artificial intelligence chips for data centers, with commercial availability from next year. AI chip leader Nvidia rose 2.7 percent.
Tech stocks added 1.4 percent and the Philadelphia SE Semiconductor index hit a fresh record high.
“To justify the valuations, we are going to have to see exceedingly good earnings. There’s a lot of expectation that those earnings are going to be good,” Brown said.
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