WASHINGTON (dpa-AFX) - Stocks turned in a strong performance throughout much of the trading session on Monday before giving back some ground going into the end of the day. The tech-heavy Nasdaq showed a strong move to the upside, reaching a new record closing high.
The major averages ended the day off their highs of the session but still in positive territory. The Nasdaq jumped 286.45 points or 1.1 percent to 27,477.31, the S&P 500 advanced 51.23 points or 0.7 percent to 7,773.95 and the Dow rose 90.94 points or 0.2 percent to 51,267.90.
The strength on Wall Street may partly have reflected easing concerns about the outlook for interest rates following last week's inflation and employment data.
A closely watched Commerce Department report showed the annual rate of consumer price growth came in below economist estimates in August, while the Labor Department's monthly employment report showed much weaker than expected job growth in September.
Following the reports, CME Group's FedWatch Tool indicates the chances of the Federal Reserve raising rates by a quarter point later this month have plummeted to 23.8 percent from 70.9 percent a week ago.
On Wednesday, the Fed is scheduled to release the minutes of its latest monetary policy meeting, which may shed additional light on the outlook for rates.
Despite the reduced expectations of an imminent rate hike, treasury yields saw further over the course of the session.
'That reinforces the idea that the long-end sell-off is being driven by more than monetary policy: elevated real yields, heavy borrowing and competition for capital continue to demand a higher term premium,' said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, 'For equities, this creates an unusual divergence as growth stocks are rallying because Fed expectations have softened, while the risk-free rate against which those valuations are judged remains exceptionally high.'
In U.S. economic news, a report released by the Institute for Supply Management showed a modest slowdown in the pace of growth in U.S. service sector activity in the month of September.
The ISM said its services PMI dipped to 54.9 in September after rising to 55.4 in August, although a reading above 50 still indicates growth. Economists had expected the index to edge down to 55.0.
Sector News
Brokerage stocks showed a substantial move to the upside on the day, resulting in a 3.6 percent spike by the NYSE Arca Broker/Dealer Index.
Despite a decrease in the price of crude oil, significant strength was also visible among oil service stocks, as reflected by the 3.1 percent surge by the Philadelphia Oil Service Index.
Biotechnology, oil producer and software stocks also turned in strong performances, while airline stocks showed a notable move to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, with markets in mainland China and South Korea closed for holidays. Japan's Nikkei 225 Index surged by 2.4 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index slid by 0.8 percent, the German DAX Index crept up by 0.1 percent and the U.K.'s FTSE 100 Index rose by 0.3 percent.
In the bond market, treasuries saw further downside after coming under pressure over the course of last Friday's session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3 basis points to 5.31 percent.
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