Stock Market Today: Stocks Resume Rally on Easing Recession Fears
The major market indexes enjoyed broad-based gains ahead of a busy week for earnings.
Stocks shook off a disappointing report on Chinese gross domestic product to post broad-based gains Monday.
Easing fears of recession helped markets continue last week's rally, which was fueled in part by better-than-expected readings on inflation. Market participants also bid up equities ahead of a busy earnings calendar this week.
Markets started Monday in muted fashion after China said its economy grew by 6.3% from a year ago, missing expectations by a wide margin. Making matters worse, GDP expanded by just 0.8% quarter-on-quarter. In related data, the unemployment rate among people ages 16 to 24 hit a record of 21.3% in June.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
China's economy has failed to bounce back as expected from its COVID-19 nadir, putting pressure on global commodities markets and throwing global economic growth forecasts into question.
Market participants decided to focus on matters closer to home, however, taking heart in last week's reading on inflation that suggests the Federal Reserve could raise interest rates just one more time this year.
The slower pace of inflation seen in both consumer and producer prices could mean that the economy is on a glide path for a so-called soft landing. Bringing inflation under control without causing a recession — and high unemployment — looks increasingly within reach, experts say.
"The probability of a U.S. recession has fallen further as both recent data and ongoing fundamentals point to rapid — and mostly painless — disinflation from here," says Goldman Sachs Chief Economist Jan Hatzius.
In single-stock news, Tesla (TSLA), which will report second-quarter earnings after markets close Wednesday, saw shares add 3.2% after the first model of its long-awaited Cybertruck finally rolled off the assembly line over the weekend.
Shareholders in Ford Motor (F) had another day entirely. F stock slumped nearly 6% after the company announced significant price cuts for all versions of its electric F-150 Lightning pickup. Prices for some of the less expensive versions of the EV pickup truck will be almost $10,000 cheaper, Ford said. The move comes amid price cuts by Tesla and other EV manufacturers as they battle for market share.
At the closing bell, the blue-chip Dow Jones Industrial Average added 0.2% to end at 34,585, while the broader S&P 500 rose 0.4% to finish at 4,522. The tech-heavy Nasdaq Composite gained 0.9% to close at 14,244.
All 30 Dow Jones stocks ranked
Markets continue to build on impressive year-to-date gains thanks to easing inflation, lower recession odds and a possible end to the Fed's campaign of interest rate hikes. But, as always, caution is warranted.
As bright a year as it's been for equity investors, plenty of experts see dark skies ahead. Pricey stock valuations and gloomy earnings forecasts could very well squelch the market's rally in the back half of 2023, bears say.
Should such an abrupt change in sentiment come to pass... well, that's where Dow Jones stocks come in. This collection of blue chip companies and dividend growth stalwarts with their battleship-like balance sheets can offer something of a safe harbor in tempestuous market times. Have a look at how analysts rank all 30 Dow Jones stocks.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.
-
When Does a Nest Egg Become a Ticking Tax Bomb?
Retirement savers with big bucks in traditional IRAs and pretax 401(k)s could face huge tax bills when RMDs kick in. One potential solution? A Roth 401(k).
By Dan Flanagan, CPA/PFS, CFP®, AEP® Published
-
Medicare or Medicare Advantage: Which Is Right for You?
From overall costs to availability of care, here's what to know about the differences between traditional Medicare and Medicare Advantage plans.
By Paola Bianchi Delp Published
-
Stock Market Today: Stocks Hit Record High Ahead of CPI Report
Equities caught a bid ahead of the all-important September reading on consumer price inflation.
By Dan Burrows Published
-
Tesla's Robotaxi Event: What Wall Street Expects
Tesla’s robotaxi event kicks off next week. Here’s what Wall Street expects to see and how analysts feel about the stock heading into the event.
By Joey Solitro Published
-
Stock Market Today: Stocks Drop, Oil Spikes After Iran Attacks Israel
A massive port strike and dismal economic data also weighed on the main indexes Tuesday.
By Karee Venema Published
-
Ford Stock Is Rising After Getting a Big Upgrade at Goldman Sachs
Ford stock has struggled in recent months, but Goldman Sachs is upbeat about improving profitability. Here's what you need to know.
By Joey Solitro Published
-
Stock Market Today: Stocks Gain After Powell Talks Rate Cuts
A late-day burst of buying power helped the main indexes close higher for the day, month and quarter.
By Karee Venema Published
-
Stock Market Today: Stocks Swing Lower After Fed's Jumbo Rate Cut
The Federal Reserve caught plenty of folks off-guard with its jumbo-sized half-percentage point rate cut.
By Karee Venema Published
-
Fed Goes Big With First Rate Cut: What the Experts Are Saying
Federal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
By Dan Burrows Published
-
Stock Market Today: Dow Hits Record High Ahead of Fed Meeting
All eyes are on this Wednesday's Fed announcement, with expectations for a jumbo-sized rate cut rising.
By Karee Venema Published