Tech rally propels S&P 500 past 6,600

General market commentary

Equity markets advanced on Monday ahead of this week’s Federal Reserve meeting, where policymakers are widely expected to cut interest rates in support of the labour market despite inflation remaining above target. The Nasdaq Composite rose 0.9% to a record close of 22,348.8, while the S&P 500 climbed 0.5% to 6,615.3, marking its first close above 6,600. The Dow Jones Industrial Average edged up 0.1% to 45,883.5. Communication services and consumer discretionary equities led gains, while defensive areas such as consumer staples and health care lagged. Optimism was further buoyed by reports of progress in US-China trade talks, including developments on TikTok’s ownership structure. Company-specific moves also shaped trading, with Tesla shares up 3.6% after Elon Musk disclosed a large purchase, Western Digital climbing 4.8% on an analyst upgrade, and Corteva down 5.7% amid reports of a potential business split.

In fixed income, US Treasury yields edged lower, with the 10-year yield settling around 4.04%, close to recent lows, as markets priced in a path of steady policy easing. The Fed’s updated economic projections and dot plot will be closely scrutinised for signals on the pace of cuts into 2025 and 2026. Asian markets finished mixed following weaker-than-expected Chinese economic data, while European equities moved higher, led by financial and real estate names. The US dollar weakened against major peers, while in commodities, oil gained after Ukrainian strikes on Russian refineries, and gold and silver advanced alongside broader risk sentiment.

Latest market and economic update

Most Asian markets extended gains on Tuesday, with Japan’s Nikkei 225 and South Korea’s KOSPI hitting record highs, supported by a likely 25bps US rate cut and strong tech and industrial shares. Chinese equities slipped amid concerns over U.S.-China chip export talks and an antitrust probe on Nvidia. Australia edged higher, while Singapore and India traded flat.

US equity futures were steady overnight, with S&P 500 Futures flat at 6,676.50, Nasdaq 100 Futures unchanged at 24,543.0, and Dow Jones Futures easing 0.1% to 46,240.0. Caution prevailed ahead of the Federal Reserve’s rate decision, while trade optimism supported sentiment.

European equities rose at the start of the week, with the STOXX 50 up 0.9% to 5,438 and the STOXX 600 gaining 0.4% to 557, supported by expectations of upcoming Federal Reserve rate cuts and easing global financial conditions. Luxury shares led the advance, with LVMH climbing nearly 3%, Kering up 5.5%, and Rubis surging 7.7% on takeover interest.

The US dollar index steadied near 97.3 this morning, hovering close to a two-month low as the Federal Reserve begins its policy meeting, with markets pricing in a 25 bps cut. Weak labour data and soft inflation added to easing bets. The euro strengthened, with EUR/USD trading at 1.1777, reflecting broad dollar softness.

Oil prices rose in Asian trade on Tuesday, with Brent at $67.63 and WTI at $63.21, supported by Ukraine’s attacks on Russian facilities and a softer dollar ahead of an expected Federal Reserve rate cut. Supply concerns offset forecasts of a global surplus and weak demand, while stricter sanctions on Russia remain the primary upside risk.

President Trump’s Fed influence expanded as the Senate narrowly confirmed economist Stephen Miran to the Board of Governors, allowing him to attend this week’s policy meeting and giving Trump three of seven board seats. Meanwhile, an appeals court blocked Trump from firing Governor Lisa Cook, reinforcing concerns over central bank independence ahead of an expected 25bps cut.

President Trump proposed allowing U.S. companies to report earnings semiannually instead of quarterly, citing cost savings and reduced short-termism, with the SEC prioritising the plan. Supporters argue it eases burdens on firms, while critics warn it could reduce transparency, increase volatility, and make markets less efficient. U.S. quarterly reporting has been mandatory since 1970.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

President Trump announced that a TikTok deal has been reached, following trade talks in Europe with China. Treasury Secretary Bessent confirmed commercial terms were agreed, with Trump and Xi set to finalise the deal on Friday. The announcement weighed on Snap and Meta shares, while Oracle rose, amid broader discussions on US-China trade and cooperation.

Tesla shares rose 3.6% on Monday after CEO Elon Musk disclosed a nearly $1 billion open-market purchase, acquiring 2.57 million shares at $372–$396 each. The equity briefly climbed 7.5%, returning to the $420 level for the first time since January 2025. Analysts see the move as a strong vote of confidence in Tesla’s robotaxi business.

China accused Nvidia of violating its anti-monopoly law, adding pressure amid U.S.-China trade talks. The probe follows previous restrictions on Nvidia’s advanced chips and raises uncertainty over sales of Mellanox networking products in China, which account for billions in revenue. Nvidia said it is cooperating with authorities, while analysts noted the impact on its overall business is limited.

Alphabet reached a $3 trillion market capitalisation on Monday, with Class A and C shares hitting record highs, driven by AI optimism and a favourable antitrust ruling. The company’s shares are up over 32% this year, supported by strong cloud revenue, Gemini AI investments, and investor confidence in its expanding portfolio beyond search, including YouTube and Waymo.

Shares of French fuel distributor Rubis SCA rose 7% on Monday after reports that CVC Capital Partners and Trafigura are considering bids. Operating in the energy sector, the company has boosted renewable investments and introduced governance reforms. Shareholder pressure and upcoming founder exits in 2027 contribute to strategic shifts amid a €3 billion market valuation.

Bank of America reiterated its Buy rating and $270 price target on Apple, citing strong early demand for the iPhone 17 lineup. Global ship times for Pro and Pro Max models exceed last year’s, signalling robust demand, particularly in China. The iPhone Air remains widely available. Analysts highlight Apple’s capital returns, AI potential, and product optionality.

Wedbush added Palo Alto Networks to its Best Ideas List, citing confidence in its platformisation strategy following the CYBR acquisition. Despite a recent share pullback, the firm views the equity as a buying opportunity, highlighting record new platform deals, strong AI recurring revenue growth, and robust FY26 guidance. Outperform rating and $225 price target maintained.

Melius Research upgraded GE Vernova to Buy, raising its price target to $740, citing strong power demand, higher pricing, and AI-driven electricity needs. Rising gas plant costs and supportive regulatory changes are expected to boost near-term earnings, with the broker forecasting continued outperformance over the next two to three years amid the global energy transition.

Rothschild downgraded Under Armour to Neutral from Buy, lowering its price target to $6 due to tariff pressures and a challenging industry environment. While operational improvements have been made, heavy reliance on North America, wholesale channels, and apparel leaves the company vulnerable. Profit recovery is expected only by fiscal 2028 amid slower global sportswear growth.

RBC Capital Markets initiated coverage of NuScale Power with a Sector Perform rating and $35 price target, citing its first-mover advantage in small modular reactors amid rising nuclear demand. However, long timelines, execution risks, and delays with partners RoPower and ENTRA1/TVA temper near-term optimism, with long-term upside dependent on securing firm orders

Upcoming data and events

Today’s market focus will be on key US economic data, including August Retail Sales Advance, Capacity Utilization, and Industrial Production MoM, providing insight into consumer spending and manufacturing activity. The NAHB Housing Market Index for September and July Business Inventories will also be released. In Europe, Vinci is set to report sales and revenue figures after the market close.

This information is provided solely for educational and informational purposes and should not be construed as investment advice, advice on specific investments or investment decisions, tax advice, legal advice, or any other form of professional or regulatory advice. The information does not take into account your personal circumstances and is provided to you on the express understanding that it does not constitute advice and should not be relied upon in making any investment decision. Investing in financial instruments involves risk. You should conduct your own research before making any investment decisions and seek the assistance of a licensed financial advisor if you are unsure. No person should act on any opinion or information contained in this document without first obtaining appropriate professional advice. Calamatta Cuschieri Investment Services Limited does not accept liability for any actions, proceedings, costs, demands, expenses, damages, or losses suffered as a result of reliance on the information herein.