U.S. stock markets are posting strong gains on Monday, rebounding after Friday’s sharp sell-off triggered by surprisingly weak labor market data. The US500 is up 1.20%, the US100 is rising 1.40%, and the US2000 is rebounding 1.44%. The catalyst for the rally is growing expectations of faster interest rate cuts by the Fed. Market sentiment improved as signs of a cooling labor market pointed to a more dovish monetary policy outlook. In addition, June factory orders fell by 4.8%, slightly below forecasts.
Investor focus is now shifting toward political developments and upcoming earnings reports. President Trump is expected to announce nominations this week for key public positions, including a new Fed board member and a new head of the Bureau of Labor Statistics (BLS). Last Friday, Trump dismissed the former BLS chief, citing data manipulation as the reason.
In reaction to the weak labor data and rising political uncertainty, the U.S. dollar is weakening, which in turn supports risk assets such as equities and cryptocurrencies. Personnel changes at the top of public institutions further undermine confidence in the U.S. financial system, prolonging the dollar sell-off.
US100 (1D)
Nasdaq 100 futures fell sharply at the end of last week, briefly breaking below the lower boundary of the narrow upward channel visible in the chart since early May. However, the 22,850-point level served as support, and prices are now recovering part of those losses. The price has returned to the rising channel, and the key signal for maintaining bullish sentiment will be a sustained close above the 20-day exponential moving average (EMA20, yellow line on the chart) around 23,150 points.
Source: xStation
Meanwhile, investors are awaiting quarterly earnings from Palantir (Monday), AMD and Pfizer (Tuesday), and Disney (Wednesday). The upcoming speech by Fed Chair Jerome Powell at the Jackson Hole symposium is also viewed as a potentially pivotal moment for market direction.
So far, earnings reports have kept investor sentiment upbeat. Of the more than half of Nasdaq 100 companies that have reported their latest quarterly results, 80% have topped revenue expectations, and over 82% have also exceeded consensus earnings forecasts.
US stocks are rallying today across all market capitalizations—a positive signal. Source: xStation 5
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