US close: Stocks erase losses after late rally, Nasdaq stays lower

(Sharecast News) - US equity markets were mixed on Monday after finishing well above their daily lows, with the S&P 500 erasing early losses to close higher but weakness in the tech sector kept the Nasdaq in the red. Overall, the mood was one of caution to start the week, as bond yields continued to creep higher in the aftermath of Friday's bumper jobs report.

The S&P 500 finished up 0.2%, having fallen as much as 0.9% earlier on, while the Nasdaq fell 0.4%.

The Dow, however, jumped 0.9% as investors shifted into more defensive cyclical sectors with economic bellwethers like banks and industrial stocks performing well.

10-year US Treasury yields rose a further 1.8 basis points to 4.787% on the back of December's stronger-than-expected reading of non-farm payrolls, which raised uncertainties regarding the Federal Reserve's near-term path for monetary policy. The yield is now trading at its highest in 14 months, with many expecting the 5.0% mark to be hit in the near future.

"Many analysts are predicting a move up to 5.0% this time round as well, as the robust labour market, along with the recent pickup in inflation, are both making it difficult for the Federal Reserve to justify further rate cuts. In fact, some analysts now believe the Fed's next move may be a hike," said David Morrison, senior market analyst at Trade Nation.

In fact, economists at Goldman Sachs announced in a note on Friday that they now expect the Fed to cut rates just twice in 2025 with the first cut in June, compared with earlier projections for three cuts with the first happening in March.

Also adding to inflationary pressures was a fresh surge in the price of oil due to Friday's announced broader US sanctions on Russian oil. WTI crude was up 2.9% at $78.78 a barrel, trading at levels not seen since mid-August.

Investors were also scaling back risk appetite ahead of the most recent producer and consumer price index reports for December, which will be released on Tuesday and Wednesday, respectively.

Meanwhile, banking heavyweights Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Bank of America will all report fourth-quarter earnings before the week is out.

Market movers

Nvidia was leading chip stocks lower as the outgoing Biden administration issued fresh restrictions over exports of advanced AI chips. The White House said the new rules were "thwarting smuggling, closing other loopholes, and raising AI security standards".

Rising bond yields were also adding to downwards pressure on growth-oriented stocks like Nvidia, which was seen as a catalyst for much of the US equity market's gains in 2024. Palantir, Tesla and Micron Technology also dropped.

Also weighing on the tech sector was Apple, which finished lower on the day of its first hearing in a $1.8bn class action lawsuit in the UK, with prosecutors accusing the tech giant of anti-competitive practices on iOS devices.

Shares in US Steel were rising strongly amid speculation that Cleveland-Cliffs and Nucor are mulling a possible big for the manufacturer after the planned sale to Nippon Steel was blocked by the government.

Dow Jones - Risers

Unitedhealth Group Inc. (UNH) $541.14 3.93% Caterpillar Inc. (CAT) $362.88 3.28% Dow Chemical Co. (DOW) $39.65 3.04% Amgen Inc. (AMGN) $270.19 3.04% 3M Co. (MMM) $134.66 2.58% JP Morgan Chase & Co. (JPM) $244.21 1.81% Merck & Co. Inc. (MRK) $100.98 1.74% Johnson & Johnson (JNJ) $144.54 1.70% Chevron Corp. (CVX) $155.35 1.44% American Express Co. (AXP) $297.02 1.27%

Dow Jones - Fallers

Walmart Inc. (WMT) $91.53 -1.58% International Business Machines Corporation (CDI) (IBM) $217.40 -1.07% Apple Inc. (AAPL) $234.40 -1.03% Boeing Co. (BA) $170.57 -0.83% Walt Disney Co. (DIS) $108.08 -0.52% Microsoft Corp. (MSFT) $417.19 -0.42% Visa Inc. (V) $306.65 -0.26% Home Depot Inc. (HD) $389.18 -0.18% Dowdupont Inc. (DWDP) $0.00 0.00% Cisco Systems Inc. (CSCO) $58.76 0.03%

S&P 500 - Risers

Mosaic Company (MOS) $26.76 8.01% Revvity, Inc. (RVTY) $122.72 7.74% CF Industries Holdings Inc. (CF) $95.54 7.59% CVS Health Corp (CVS) $51.52 7.31% Humana Inc. (HUM) $287.36 6.81% Albemarle Corp. (ALB) $91.51 5.76% Illumina Inc. (ILMN) $144.22 5.51% Deere & Co. (DE) $430.12 5.22% Waters Corp. (WAT) $399.87 5.13% Leggett & Platt Inc. (LEG) $10.16 5.06%

S&P 500 - Fallers

Edison International (EIX) $57.27 -11.89% Macy's Inc. (M) $14.56 -8.08% Nektar Therapeutics (NKTR) $0.96 -6.67% Kohls Corp. (KSS) $13.04 -4.68% Gap Inc. (GAP) $23.06 -4.51% Micron Technology Inc. (MU) $95.06 -4.31% American Airlines Group (AAL) $17.60 -4.24% Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $403.94 -3.42% Edwards Lifesciences Corp. (EW) $71.13 -3.17% Advance Auto Parts (AAP) $44.85 -2.92%

Nasdaq 100 - Risers

Illumina Inc. (ILMN) $144.22 5.51% NetEase Inc. Ads (NTES) $94.25 3.45% Amgen Inc. (AMGN) $270.19 3.04% DENTSPLY Sirona Inc. (XRAY) $18.66 2.98% Regeneron Pharmaceuticals Inc. (REGN) $716.90 2.87% J.B. Hunt Transport Services Inc. (JBHT) $179.23 2.83% Incyte Corp. (INCY) $72.37 2.59% Verisk Analytics Inc. (VRSK) $275.47 2.55% Tesla Inc (TSLA) $403.31 2.17% Vodafone Group Plc ADS (VOD) $8.20 1.86%

Nasdaq 100 - Fallers

Micron Technology Inc. (MU) $95.06 -4.31% American Airlines Group (AAL) $17.60 -4.24% Qurate Retail Inc. (QRTEA) $0.34 -3.82% Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $403.94 -3.42% Dollar Tree Inc (DLTR) $71.15 -2.40% Cadence Design Systems Inc. (CDNS) $292.50 -2.17% Nvidia Corp. (NVDA) $133.23 -1.97% Hologic Inc. (HOLX) $70.29 -1.97% Intuit Inc. (INTU) $613.22 -1.64% Asml Holdings N.V. (ASML) $727.41 -1.57%