Markets gain modestly ahead of key economic data
U.S. stocks rose modestly Monday as investors await a series of economic reports that could determine whether the Federal Reserve will move forward with an interest rate cut at its next meeting. The S&P 500 inched up 0.2%, sitting just shy of its all-time high. The Nasdaq Composite led gains with a 0.6% rise, while the Dow Jones Industrial Average dipped slightly by 16 points, or less than 0.1%.
Several stocks made significant moves following index changes and corporate news. AppLovin surged 12.2% and Robinhood Markets jumped 15.2% after being named to join the S&P 500 later this month alongside Emcor Group, which slipped 0.5%. Their inclusion is expected to drive investor interest, as many funds track or benchmark against the S&P 500.
SpaceX deal shakes up telecom sector
EchoStar climbed 14.7% after confirming a $17 billion agreement to sell wireless spectrum licenses to SpaceX. The deal, which includes both cash and stock, will support Starlink’s rollout of its direct-to-cell service. SpaceX also committed to covering $2 billion in EchoStar’s debt interest through 2027. The news rattled major telecom stocks, with Verizon falling 1.9% and AT&T dropping 1.6%.
The move is expected to significantly expand Starlink’s capacity and reach, especially in underserved areas, further intensifying competition in the telecom space.
Economic data could sway Fed decision
Markets remained cautious ahead of critical economic reports due later in the week. On Tuesday, revised job growth numbers through March are expected, possibly showing weaker hiring than previously reported. Inflation reports are scheduled for Wednesday and Thursday, offering insight into wholesale and consumer price trends.
The Federal Reserve faces a dilemma: a weakening labor market might justify a rate cut, but persistent inflation—fueled in part by tariffs introduced under President Donald Trump—could force caution. Investors generally favor rate cuts, as they tend to stimulate the economy and support higher asset prices. However, they can also risk reigniting inflation.
Currently, traders anticipate the Fed will implement its first rate cut of the year at its meeting two Wednesdays from now.
Global markets advance amid political shifts
Outside the U.S., markets in Europe and Asia posted gains. Japan’s Nikkei 225 rose 1.5% following Prime Minister Shigeru Ishiba’s announcement that he intends to resign. While the resignation had been anticipated, investors welcomed the clarity it brings. The Liberal Democratic Party will now begin the process of selecting a new leader, with Ishiba remaining in office until a successor is chosen and confirmed by parliament.
Meanwhile, Japan’s Cabinet Office upgraded its GDP estimate for the fiscal first quarter to a 2.2% annualized rate, up from the previous 1.0%. The revision was driven by stronger consumer spending and higher inventory levels, indicating a more robust economic recovery than initially thought.
In the bond market, Treasury yields continued to fall. The yield on the 10-year Treasury note declined to 4.06% from 4.10% on Friday and 4.28% last Tuesday, reflecting heightened expectations of a near-term rate cut by the Fed.
