US Stocks Reach Record Highs as Risk Rally Continues

• US stocks continue to tick up higher on Monday as the risk-on mood prevails.
• Fresh all-time highs from Friday’s trading session laid the foundation for further gains to open the new week.
• US PCE inflation is set to be a crucial data point this week for shaping Fed expectations.

Monday saw US stocks climbing broadly higher, reaching new all-time highs as investors carried forward the momentum from last week’s record-breaking gains. The tech sector played a prominent role in propelling the Dow Jones Industrial Average (DJIA) above the $38,000.00 mark for the first time ever.

The Standard & Poor’s (S&P) 500 index continued its upward trajectory, closing Monday at $4,850.43 after hitting a new record high of $4,866.05, indicating a strong influx of stock bets from investors.

Despite early bearish sentiment in 2024, stock indexes managed to recover, with investors dialing down on their overly optimistic expectations for rapid rate cuts from the Federal Reserve (Fed) and gaining a more realistic outlook on potential rate adjustments.

According to the CME’s FedWatch tool, Fed rate swaps show less than 60% likelihood of a rate cut at the Federal Open Market Committee’s March meeting, down from over 80% just a month ago.

The Dow Jones Industrial Average surged 138.01 points on Monday, closing the day up by 0.36%, while the S&P 500 gained 10.62 points to end the day with a 0.22% increase, reaching $4,850.43.

The NASDAQ Composite Index closed at $15,360.29, up by 0.32%, and the NASDAQ 100 index rose by 0.09%, ending the day at $17,330.38.

S&P 500 Technical Outlook

The S&P 500 has continued its upward momentum, rising 3.22% from last week’s low of $4,714.37. Although technical barriers have been overcome, short-term indicators are signaling overbought conditions, as seen in the Relative Strength Index (RSI) and Moving Average Convergence-Divergence (MACD) on the hourly charts.

With 11 out of the last 12 weeks closing in the green, the S&P 500 shows a cumulative gain of nearly 19% following October’s dip, underscoring its upward trend.

S&P 500 Hourly Chart

S&P 500 Daily Chart

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