U.S. stocks surged Monday, reversing Friday’s losses, as optimism grew around the possibility of an earlier-than-expected interest rate cut from the Federal Reserve. Strong earnings from major tech companies also helped lift investor sentiment.

By the close of trading, the Dow Jones Industrial Average had added 575 points (up 1.3%), the S&P 500 climbed 1.5%, and the NASDAQ Composite advanced by 2%.

Friday’s sharp drop in the markets came after President Donald Trump signed an executive order imposing steep tariffs on imports from nearly 70 countries — a move that rattled investors and sent the S&P 500 to its worst daily performance in over two months.

Adding to the pressure was a disappointing jobs report that revealed significant downward revisions to previous data. Tensions escalated further when Trump dismissed the head of the U.S. statistics agency, alleging — without proof — that the labor figures were manipulated. Analysts warned the firing could cast doubt on the credibility of official U.S. economic reports.

---

Weak Employment Data Fuels Rate Cut Hopes

Monday’s focus turned to U.S. factory orders for June, as investors continued to digest Friday’s lackluster nonfarm payrolls report. The Labor Department revealed that only 73,000 jobs were added in July — well below the forecast of 110,000. In addition, the job totals for May and June were revised downward by a combined 258,000 positions.

This slowdown in job creation strengthened the case for monetary easing, with market pricing now assigning over an 80% chance of a Fed rate cut in September.

Despite the recent volatility, Morgan Stanley strategist Mike Wilson reiterated his bullish stance on U.S. equities in a client note. He encouraged investors to take advantage of any market dips, citing continued strength in corporate earnings revisions as a reason for optimism.

Wilson pointed to April’s rebound as a turning point, calling it both a “Capitulation Day” and “Liberation Day” that marked the end of the 2024 bear market and the beginning of a new bull run — now four months in.

While the weak jobs data and the Fed’s cautious stance could lead to short-term consolidation, Wilson remains upbeat: “We’re buyers on dips and positive on the 12-month outlook.”

---

AI Momentum Keeps Tech Stocks in the Lead

Tech continued to outperform, buoyed by enthusiasm around artificial intelligence. NVIDIA (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Meta Platforms (NASDAQ: META) were among the top gainers, with Microsoft and Meta extending their rally after blockbuster earnings last week.

---

Eyes on Corporate Earnings: Big Week Ahead

Investors are gearing up for a busy earnings week, with more than 150 companies across sectors expected to report. The solid start to the earnings season has helped reinforce the long-term bullish narrative tied to AI advancements.

On Tuesday, all eyes will be on Advanced Micro Devices (AMD) and Caterpillar, as their results may offer insight into semiconductor demand and global industrial health. Wednesday brings earnings from Disney, McDonald’s, and Uber.

Meanwhile, shares of Berkshire Hathaway slipped after the firm reported a $3.76 billion write-down tied to its stake in Kraft Heinz.

Tesla (NASDAQ: TSLA) shares rose, following news that the board had approved a 96 million share restricted stock grant for CEO Elon Musk, based on a recommendation from a special committee of independent directors.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.