(Sharecast News) - US stocks rebounded strongly on Monday after a sell-off the previous session, as gloomy economic data raised the likelihood that the Federal Reserve will cut interest rates to shore up the economy.
The Dow finished 1.3% higher, while the S&P 500 gained 1.5% and the Nasdaq jumped 2.0%.
Stocks fell sharply on Friday - the Dow dropped to its lowest in five weeks - as a barrage of weak economic data and the announcement of a whole new set of US import tariffs weighed heavily on stocks. In particular, a much weaker-than-expected July non-farm payrolls report raised fresh questions about the strength of the US economy heading into the autumn.
"The development also shines new light on the Federal Reserve. Previously content to sit on its hands until it could comfortably gauge any inflationary effects of the tariffs, it will now need to question whether the economy is in need of some stimulus," said Richard Hunter, head of markets at Interactive Investor.
"Indeed, the odds for a September rate cut spiked after the release to over 85% in contrast to a sharp fall earlier last week as inflation alone was seen as the driver for Fed action or indeed inaction."
According to Joshua Mahony, chief market analyst at Scope Markets, the payroll data brought a "huge shift" in rate-cut predictions, "with the CME now pricing a 45% chance of three cuts in the remaining three meetings this year (up from 20%)".
Monday also saw the release of yet more negative data, after factory orders fell by their most in five years in June. New orders for manufactured goods slumped 4.8% over the month, according to the Census Bureau, partially reversing a revised 8.3% jump in May but the steepest decline since April 2020.
In other news, oil prices were in focus at the open, with WTI falling by around $1 to $66.29 a barrel after OPEC+ agreed to another large output increase, with investors mulling over the possibility of a global oversupply.
Market movers
Tesla gained after approving a $29bn share award for chief executive officer Elon Musk, aiming to secure his leadership at a time of declining sales and strategic upheaval. The award, which granted Musk 96 million new shares, came as he appealed a Delaware court ruling that voided his 2018 compensation package - then worth over $50bn - on the grounds that it was excessive and unfair to shareholders.
Tesla's board said the new award, recommended by a special committee of two directors, was necessary to retain Musk as the company shifted focus from electric vehicles to artificial intelligence and autonomous technologies.
Wayfair shares traded 13% higher after the furniture retailer's second-quarter earnings smashed Wall Street expectations, while streaming giant Spotify jumped 5% after revealing it will be hiking the price of its premium individual subscriptions.
Palantir was also performing well ahead of the software giant's latest quarterly earnings report due out after the close.
Dow Jones - Risers
3M Co. (MMM) $147.81 2.40%
Walt Disney Co. (DIS) $119.35 2.37%
Goldman Sachs Group Inc. (GS) $725.67 2.32%
Johnson & Johnson (JNJ) $171.08 2.22%
Microsoft Corp. (MSFT) $535.64 2.20%
Cisco Systems Inc. (CSCO) $68.49 2.06%
Home Depot Inc. (HD) $380.82 1.92%
Travelers Company Inc. (TRV) $263.00 1.81%
Amgen Inc. (AMGN) $301.94 1.70%
JP Morgan Chase & Co. (JPM) $294.26 1.69%
Dow Jones - Fallers
Dow Chemical Co. (DOW) $21.59 -0.92%
Chevron Corp. (CVX) $151.04 -0.24%
S&P 500 - Risers
Idexx Laboratories Inc. (IDXX) $682.78 27.49%
VF Corp. (VFC) $12.58 7.89%
Kohls Corp. (KSS) $11.39 6.15%
Tapestry Inc. (TPR) $111.84 5.25%
Franklin Resources Inc. (BEN) $25.11 4.93%
Leggett & Platt Inc. (LEG) $8.44 4.58%
Newmont Corporation (NEM) $65.42 4.52%
F5 Inc. (FFIV) $321.00 4.41%
Resmed Inc. (RMD) $291.44 4.38%
PVH Corp. (PVH) $74.45 4.36%
S&P 500 - Fallers
LyondellBasell Industries (LYB) $50.90 -4.72%
Macy's Inc. (M) $11.90 -3.72%
Fluor Corp. (FLR) $39.99 -3.45%
Berkshire Hathaway Inc. Class B (BRK.B) $459.11 -2.90%
Church Dwight Co Inc. (CHD) $91.54 -2.67%
Adobe Systems Inc. (ADBE) $338.85 -2.57%
Lamb Weston Holdings, Inc. (LW) $54.64 -2.41%
Carmax Inc. (KMX) $54.74 -2.36%
Kraft Heinz Co. (KHC) $26.80 -2.23%
Exxon Mobil Corp. (XOM) $107.37 -2.07%
59.72 (0.66%)
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