U.S. stock markets edged higher on Monday, buoyed by strong performances from technology stocks and Walmart, allowing investors to brush off concerns related to a potential criminal investigation into Federal Reserve Chairman Jerome Powell. The S&P 500 reached a new intraday high, driven by gains in large-cap tech and retail stocks.
Tech and Retail Stocks Drive Market Gains
Technology shares led the charge, with the sector rising by 0.8%. Walmart shares surged 2.7% following the company’s recent decision to move its stock listing from the NYSE to Nasdaq. This shift, which also precedes Walmart’s inclusion in the Nasdaq-100 index on January 20, is expected to attract significant passive investment flows, further boosting the stock.
Market Dismisses Investigation Headlines
Despite the initial dip earlier in the session due to reports that the U.S. Justice Department might indict Powell over his testimony regarding a Federal Reserve building renovation, the market largely shrugged off the news. Powell had dismissed the potential investigation, claiming it was a politically motivated move aimed at exerting influence over the Fed’s policy decisions. Investors appeared to view the situation as a distraction rather than a serious risk to financial stability or imminent policy shifts.
Financial Sector Struggles Amid Rate Cap Proposal
While major indices moved higher, the financial sector lagged, falling by 1.2%. The sector’s decline came after President Donald Trump proposed a cap on credit card interest rates, suggesting a 10% ceiling for the next year, starting January 20. This proposal weighed heavily on major banks and consumer finance companies, particularly Citigroup, which saw a 3.4% drop, American Express, down 4.4%, and Capital One, which lost 7.4%. Other financial institutions like JPMorgan Chase and buy-now, pay-later provider Affirm Holdings also experienced declines.
Earnings Season and Inflation Data in Focus
Looking ahead, investors are shifting their attention to the start of the fourth-quarter earnings season, set to unofficially begin Tuesday with results from major banks such as JPMorgan. Corporate earnings guidance will play a crucial role in shaping market sentiment for the near term.
Markets are also awaiting the release of the U.S. consumer price index (CPI) report, which is expected on Tuesday. The data could significantly impact expectations for future interest rate cuts by the Federal Reserve. Currently, futures markets are pricing in the likelihood of at least two quarter-point reductions in the Fed’s benchmark interest rate before the end of the year.
Market Close and Performance Overview
By the end of the day, major indexes closed modestly higher. The Dow Jones Industrial Average ended nearly flat at 49,503.96. The S&P 500 gained 0.19%, closing at 6,979.04, while the Nasdaq Composite rose 0.49%, ending the day at 23,786.33. Market breadth was positive, with advancing stocks outpacing decliners on both the New York Stock Exchange and the Nasdaq.
