The S&P 500 Index ($SPX) (SPY) closed up by +1.49% on Monday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.71%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +2.83%. December E-mini S&P futures (ESZ26) rose +1.50%, and December E-mini Nasdaq futures (NQZ26) rose +2.84%.
Stock indexes rallied sharply on Monday, with the S&P 500 posting a 5-week high and the Nasdaq 100 posting a 3-month high. Stocks surged Monday after crude oil prices plunged, pushing bond yields lower and improving market sentiment. WTI crude sank more than -4% to a 1.5-week low, and the 10-year T-note yield fell -3 bp to 4.96%. Also, positive anticipation ahead of a summit later this week between Presidents Trump and Xi Jinping is lifting equity markets. In addition, stock indexes rose on support from a rally in chipmakers and AI-infrastructure stocks, along with a rally in cryptocurrency-exposed stocks, as Bitcoin’s price surged to a 7.5-month high.
Stocks garnered support on Monday on optimism about talks between the US and China after US and Chinese officials offered upbeat assessments of their talks on artificial intelligence, trade, and investment ahead of this week’s summit between Presidents Trump and Xi Jinping. US Trade Representative Jamieson Greer said, “The focus is on stability between the US and China,” and we are working on a trade truce extension.
Monday’s US economic news showed the Aug Chicago Fed national activity index fell -0.12 to -0.04, right on expectations.
Hawkish Fed comments on Monday were negative for stocks and bonds. Chicago Fed President Austan Goolsbee said that to restore price stability, the Fed may need to raise interest rates further and narrow the gap between supply and demand, which could lead to drops in employment, wages, and growth. Also, St. Louis Fed President Alberto Musalem said core inflation may be running 1 percentage point above the Fed’s 2% target and that the Fed likely needs to hike interest rates further.
Bitcoin (^BTCUSD) surged by more than +7% on Monday to a 7.5-month high, adding to last Friday’s +5% surge, after the SEC moved forward with a plan to allow digital versions of securities to start trading in the US.
Oct WTI crude oil prices (CLV26) sank more than -4% on Monday to a 1.5-week low on diplomatic efforts to end the US-Iran war and signs that crude flows are still getting through the Strait of Hormuz. President Trump said he would “probably” be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the UN General Assembly in New York this week. Also, Admiral Brad Cooper, head of US Central Command, said crude and LNG flows in the past two weeks through the Strait of Hormuz are running at a six-month high.
Markets are discounting a 55% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled higher on Monday. The Euro Stoxx 50 closed up +1.31%. China’s Shanghai Composite climbed to a 1.5-week high and closed up +0.97%. Japan’s Nikkei-225 Stock Average did not trade today with Japanese markets closed for the Respect-for-the-Aged Day holiday.
Interest Rates
December 10-year T-notes (ZNZ6) closed up by +7 ticks on Monday. The 10-year T-note yield fell -3.7 bp to 4.959%. T-notes rose on Monday after WTI crude oil fell more than -4% to a 1.5-week low, easing inflation expectations. T-notes fell back from their best level on hawkish comments from Chicago Fed President Austan Goolsbee and St. Louis Fed President Alberto Musalem, who said that to restore price stability, the Fed may need to raise interest rates further. Supply pressures are also bearish for T-notes as the Treasury will auction $211 billion of T-notes and floating-rate notes this week, beginning with Tuesday’s auction of $69 billion of 2-year T-notes.
European government bond yields moved lower on Monday. The 10-year German bund yield fell to a 1-week low of 3.442% and finished down -6.1 bp to 3.458%. The 10-year UK gilt yield dropped to a 1-week low of 5.200% and finished down -8.3 bp to 5.212%.
In its monthly report released on Monday, the German Bundesbank said Q3 GDP will expand only “modestly” in Q3 because of short-term drivers like low water levels in the Rhine River, but the economy is expected to grow at a “stronger” pace again in Q4 and will “remain on its current path to recovery.” The Bundesbank added that “persistently high prices, not only for crude oil but also for natural gas and electricity, could amplify both direct and indirect effects and delay the return of the inflation rate to 2%.”
Markets are discounting a 46% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI stocks rallied on Monday, supporting gains in the broader market. The iShares Semiconductor ETF (SOXX) closed up more than +4% at a 5-week high. ARM Holdings Plc (ARM) closed up more than +16% to lead gainers in the Nasdaq 100, and Intel (INTC) closed up more than +12% to lead gainers in the S&P 500. Also, Advanced Micro Devices (AMD) and Qualcomm (QCOM) closed up more than +9%, and Marvell Technology (MRVL) closed up more than +6%. In addition, Applied Materials (AMAT) and Lam Research (LRCX) closed up more than +5%, and KLA Corp (KLAC) closed up more than +4%.
The Magnificent Seven technology stocks moved higher on Monday, providing support to the overall market. Meta Platforms (META) closed up more than +11% after the company’s new Muse artificial intelligence app rose to the top of mobile app charts. Also, Tesla (TSLA) closed up +3%, and Nvidia (NVDA) closed up more than +2%. In addition, Alphabet (GOOGL), Amazon.com (AMZN), and Microsoft (MSFT) closed up more than +1%, and Apple (AAPL) closed up +0.85%.
Cryptocurrency-exposed stocks surged on Monday after Bitcoin (^BTCUSD) rallied more than +7% to a 7.5-month high on positive carryover from last Friday when the SEC moved forward with a plan to allow digital versions of securities to start trading in the US. Strategy (MSTR) closed up more than +9%, and BitMine Immersion Technologies (BMNR) closed up more than +7%. Also, Bullish (BLSH) and Galaxy Digital Holdings (GLXY) closed up more than +5%, and Coinbase Global (COIN) closed up more than +3%. In addition, Circle Internet Group (CRCL) and Robinhood Markets (HOOD) closed up more than +2%, and Riot Platforms (RIOT) and Iren Ltd (IREN) closed up more than +1%.
Cybersecurity stocks moved higher on Monday, supporting gains in the overall market. Cloudflare (NET) closed up more than +8%, and SentinelOne (S) closed up more than +5%. Also, Zscaler (ZS), Crowdstrike Holdings (CRWD), and Okta (OKTA) closed up more than +4%. In addition, Fortinet (FTNT) closed up more than +3%, and Palo Alto Networks (PANW) closed up more than +2%.
Airlines and cruise line operators rallied on Monday due to the -4% plunge in WTI crude oil to a 1-week low, which lowers fuel costs and boosts profitability prospects for the companies. United Airlines Holdings (UAL) closed up more than +5%, and American Airlines Group (AAL) closed up more than +4%. Also, Delta Air Lines (DAL) and Alaska Air Group (ALK) closed up more than +3%, and Carnival (CCL) closed up more than +2%. In addition, Southwest Airlines (LUV), Royal Caribbean Cruises (RCL), and Norwegian Cruise Line Holdings (NCLH) closed up more than +1%.
Energy stocks and service providers retreated on Monday after WTI crude oil plunged more than -4% to a 1-week low. Marathon Petroleum (MPC) closed down more than -5% to lead losers in the S&P 500, and Phillips 66 (PSX) and Valero Energy (VLO) closed down more than -4%. Also, ConocoPhillips (COP) and ExxonMobil Holdings (XOM) closed down more than -3%, and Diamondback Energy (FANG), Occidental Petroleum (OXY), APA Corp (APA), and Devon Energy (DVN) closed down more than -2%. In addition, Chevron (CVX) closed down more than -2% to lead losers in the Dow Jones Industrials.
Warner Bros. Discovery (WBD) closed up more than +10% after Paramount Skydance settled lawsuits brought by 12 state attorneys general and the Writers Guild trade union, a move that will allow Paramount to acquire Warner Bros. Discovery.
Ciena (CIEN) closed up more than +5% after Evercore ISI upgraded the stock to outperform from in line with a price target of $550.
Candel Therapeutics (CADL) closed up more than +3% after Bank of America Global Research upgraded the stock to buy from neutral with a price target of $18.
HP Inc. (HPQ) closed down more than -4% after projecting that industry-wide personal computer unit volumes will decline mid-single-digits in 2027.
Earnings Reports (9/22/2026)
AutoZone Inc (AZO), KB Home (KBH), MillerKnoll Inc (MLKN), Thor Industries Inc (THO), Worthington Enterprises Inc (WOR).
