NEW YORK — U.S. stock markets gained momentum on Monday as Wall Street experienced another upward surge in its dynamic trajectory. The S&P 500 saw a rise of 0.6%, marking a consecutive second day of gains after its stark decline beneath its recent peak last week. The Dow Jones Industrial Average saw an uptick of 353 points, or 0.9%, while the Nasdaq composite experienced a modest increase of 0.3%.
Anticipation surrounds the potential for more dramatic fluctuations ahead, especially with the Federal Reserve’s upcoming decision on interest rates later this week amidst ongoing concerns over President Donald Trump’s tariff-related trade conflicts. Stocks have largely faced pressure due to fears that these unpredictable policy shifts may lead U.S. consumers and businesses to curtail their expenditures, potentially stifling economic growth. Surveys highlight a significant drop in confidence, and some corporations are already noting behavioral shifts among their clientele.
On Monday, a report surfaced indicating that U.S. retailers experienced weaker revenue than anticipated last month, although the figures might not be as dire as initially perceived. The main area of shortfall was attributed to unexpectedly low sales in the automobile sector and reduced fuel costs. Excluding these factors, the performance aligned more closely with predictions.
Treasury yields initially increased following the release of this report, which typically signals a boost in bond investors’ confidence regarding the U.S. economy’s robustness. However, yields fluctuated notably throughout the day. “In our view, this morning’s February retail sales report offers evidence of a limited, modest economic slowdown, rather than signaling a gathering recession,” stated Jennifer Timmerman, an investment strategy analyst at Wells Fargo Investment Institute.
The conversation surrounding a potential recession represents a dramatic turnaround for investors, especially considering the U.S. economy’s strong close last year. Optimism was high around Trump’s policy changes designed to spur growth. While hiring remains relatively stable, which could sustain economic expansion, even discussions about a recession could undermine confidence.
This is the delicate backdrop against which Federal Reserve Chair Jerome Powell will make his announcement on Wednesday regarding interest rates. Although it’s widely expected that the Fed will hold rates steady, as it has throughout the year to assess economic conditions, Powell’s comments concerning future plans will be under scrutiny. There’s considerable expectation for the Fed to cut its main interest rate two or three more times in 2025. The challenge lies in balancing such cuts to prevent a rise in inflation or maintaining rates that may inflict unnecessary economic constraints.
On the corporate front, Intel experienced a climb of 6.8% as it continued to rally after appointing semiconductor industry expert Lip-Bu Tan as its CEO last week. Meanwhile, PepsiCo’s stock rose by 1.9% after announcing an acquisition agreement to purchase the prebiotic soda brand Poppi for $1.65 billion. These gains helped balance a 4.8% decline in Tesla’s shares, as the company faces challenges this year amid concerns regarding its branding closely tied to Elon Musk, who has been implementing spending cuts within the U.S. government. Tesla vehicles and dealerships have become focal points of criticism from those opposing Trump’s policies.
In numerical terms, the S&P 500 increased by 36.18 points to 5,675.12, the Dow Jones Industrial Average ascended by 353.44 points to 41,841.63, and the Nasdaq composite appreciated by 54.58 points to 17,808.66.
In the bond market, Treasury yields showed mixed results. The 10-year Treasury note’s yield rose from 4.28% pre-retail sales report release to close to 4.33%, before receding to 4.29%, marginally down from Friday’s late figure of 4.31%.
Internationally, stock indices displayed an upward trend across Europe and Asia. Chinese markets benefited from better-than-expected factory output reports, complemented by government briefings aimed at invigorating consumer spending—critical for uplifting the country’s economic malaise. Stocks advanced in Hong Kong by 0.8% and in Shanghai by 0.2%. This year, international markets have outperformed their U.S. counterparts, reversing years of American market dominance.