Following up on one of its worst weeks in months, Wall Street closed out Monday on a high note, with the Nasdaq getting close to its previous high mark.
MANHATTAN (CN) — The market pendulum swung again into bull territory, with Wall Street indices posting significant gains after one of its worst weeks in months.
By the closing bell, the Nasdaq gained 207 points for the day, a 1.9% increase. The tech-heavy index is still about 1,000 points shy of the previous high mark of 12,056 points it set back in early September.
The Dow Jones Industrial Average also posted significant gains, increasing 326 points for a 1.18% gain, while the S&P 500 also gained 1.2%.
The rally was a start contrast to the rout investors suffered last week, when the Dow dropped 1,600 points in two days and the Nasdaq wiped more than 1,200 points off its board.
As with last week’s equity rollercoaster, Big Tech set the tone for the rest of the market, though some companies fared better than others.
Apple increased 3% in value for the day, but Twitter and Facebook both lost some, dropping 0.17% and 0.4% for the day, respectively. Amazon and Google’s parent company also both fell slightly, dropping 0.4% each.
Tesla, which still hasn’t fully recovered from last week’s 21% drop, clawed back an additional 12% by the end of trading on Monday.
Proposed deals also helped the sector. Chipmaker Nvidia also saw a steep increase, rising 5.8% for the day, after it announced it would buy competitor Arm Holdings from Softbank for about $40 billion on stock and cash.
Shares of Oracle gained 4.3% on news that the company was tapped by TikTok parent company ByteDance to take over the U.S. operations of the social media sensation, beating out Microsoft.
The boost in stock markets and repeated flattening of unemployment claims have had a corresponding effect on voters’ view of the economy. According to a recent survey by The Morning Consult, 52% of voters say the economy is recovery, up from 43% during the last week of August. The poll his highly polarized, however, with 48% of Democrats saying the economy is getting worse while 76% of Republicans say it is getting better.
Once again, investors await further instruction from the Federal Reserve, which is holding another of its Federal Open Market Committee meetings on Wednesday.
The Fed has been extremely proactive in tackling the recession, keeping interest rates low and bolstering floundering industries with a number of liquidity facilities.
Last month it also took the historic move of changing how it approached inflation and employment, sending markets into a rally. Instead of looking at employment from the perspective of “deviations from its maximum level,” the central bank would focus on “shortfalls of employment from its maximum level.”
Many experts predict the Fed will hold course, keeping the federal funds rate unchanged. “The Fed also might implement an even more expansionary monetary policy in the next few years than they did in the aftermath of the Great Recession, but they seem unlikely to commit to this course until later in the recovery,” analysts at PNC Bank said.
Chairman Jerome Powell has repeatedly stressed it can do only so much and that Congress needs to pass fiscal a fourth stimulus measure to keep the employment on the right track — something lawmakers have so far failed to do.
One ever-present negative indicator is the coronavirus, which marked a new, dire milestone on Sunday: the highest one-day increase in infections since the pandemic began. More than 308,000 cases of Covid-19 were reported worldwide, according to the World Health Organization.
Cases of Covid-19 had slowed earlier in the summer but are once again picking up. Now more than 29 million have contracted Covid-19 worldwide, according to data compiled by Johns Hopkins University, while roughly 925,000 have died. In the United States alone, about 6.5 million have been confirmed infected while almost 194,000 have died.