S&P 500, Nasdaq 100 Target Eighth Straight Gain As Dollar Nears 2024 Lows; Small Caps, Emerging Markets Rebound: What's Driving Markets Monday?

Wall Street kicked off the week leading up to the Federal Reserve’s Jackson Hole Symposium with a positive momentum as traders anticipate reassuring signals from policymakers about the impending start of interest rate cuts, following further easing of inflation last month.

Both the S&P 500 and the Nasdaq 100 were positive by 1:30 p.m. ET, eyeing their eighth straight session in the green. All the eleven S&P 500 sectors recorded a gain, indicating widespread bullish sentiment.

With the corporate earnings season nearing its end, nearly 95% of S&P 500 companies have already reported results. According to FactSet data, 79% of these companies have delivered a positive earnings per share (EPS) surprise, while 60% have reported better-than-expected revenue. The blended year-over-year earnings growth rate for the S&P 500 stands at 10.9%, marking the strongest growth since Q4 2021.

Growing confidence that the Federal Reserve will begin its monetary easing cycle in September pushed the U.S. dollar index below the 102 level, a threshold last seen on January 2, 2024.

The weakening of the U.S. dollar sparked a rally in emerging-market stocks, with the iShares MSCI Emerging Markets Index Fund (NYSE:EEM) rising 0.9% on Monday, setting it on course for its ninth positive close in the last 10 sessions.

U.S. small caps also rebounded, with the iShares Russell 2000 ETF (NYSE:IWM) climbing 0.7%, breaking above its 50-day moving average and slightly outperforming large-cap indices.

In the commodities market, gold held steady at $2,500 per ounce after hitting record highs on Friday, its best-performing session since December. Oil prices fell 2.4% as the absence of retaliation from Iran against Israel has reduced some of the risk premium in crude prices.

Bitcoin (CRYPTO: BTC) edged 0.5% higher after a 1.8% drop on Sunday.

Monday’s Performance In Major US Averages, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.5% higher to $557.03.
• The SPDR Dow Jones Industrial Average (NYSE:DIA) also rose 0.5% to $408.88.
• The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) edged up 0.4% to $476.92.
• The iShares Russell 2000 ETF rallied 0.8% to $214.17.
• The Energy Select Sector SPDR Fund (NYSE:XLE) and The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) outperformed, both up by 1%. The Consumer Staples Select Sector SPDR Fund (NYSE:XLP) lagged, up by 0.4%.

Monday’s Stock Movers

• McDonald’s Corp. (NYSE:MCD) rallied 3.3% after Evercore ISI adjusted the stock price target from $300 to $320, maintaining an Outperform rating.
• Advanced Micro Devices Inc. (NASDAQ:AMD) rose 2.5% after the company announced the acquisition of ZT System, a supplier of artificial intelligence infrastructure, in a cash-and-stock deal valued at $4.9 billion.
• General Motors Company (NYSE:GM) rose 0.8% after laying off over 1,000 salaried employees globally in its software and services division as part of a review aimed at streamlining operations.
• Amer Sports Inc. (NYSE:AS) rallied over 8% ahead of its quarterly earnings report, scheduled in the premarket on Tuesday.
• Stocks reacting to company earnings included The Estee Lauder Companies Inc. (NYSE:EL) and ZIM Integrated Shipping Services Ltd. (NYSE:ZIM).
• Palo Alto Networks Inc. (NASDAQ:PANW) and Fabrinet (NYSE:FN) will publish their results after the close.

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Image created using artificial intelligence via Midjourney.