Dow Jumps 260 Points as Stocks End 5-Day Losing Streak, Nasdaq Drops

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Key Takeaways

The blue-chip Dow Jones adds over 260 points led by a rally in energy shares
Investor focus on Tuesday is on the latest inflation data in the US, the CPI report for August

Dow Jones Sprints, Nasdaq Composite Edges Lower

The US stock market mostly rose on Monday with the Dow Jones Industrial Average and the S&P500 snapping a 5-day losing streak. The Nasdaq Composite edged lower despite moderate gains for technology giants.

Monday’s market action kicked off relatively muted and to the downside with all three major averages trading in the red. In the afternoon hours, investors increased their exposure particularly to energy stocks, fueling a rally in the oil and gas sector.

The 30-stock Dow Jones Industrial Average advanced 261.91 points, or 0.76%, to finish the session at 34,869.63. The broader S&P500 index added 10.15 points, or 0.23%, to settle at 4,468.73. The tech-heavy Nasdaq Composite dipped by just 9.91 points, or 0.07%, to end the day at 15,105.58.

Technology Stocks and Energy Companies Rise

Big tech names such as Microsoft, and Apple gained about half a percent each. Shares of Tesla and Google parent Alphabet jumped about 1% apiece.

Energy companies were among the leading performers in the S&P500. The rally in energy was underpinned by a rise in oil prices after the Organization of the Petroleum Exporting Countries (OPEC) announced it projected oil demand around the world to exceed pre-pandemic levels.

US equity futures pointed to a flat open. Futures on the Dow, the S&P500, and the Nasdaq Composite were lower between 0.1% and 0.2% in pre-market trading on Tuesday.

European Markets Finish Higher

In Europe, the stock market finished Monday trading on a positive note. All major European bourses closed up between 0.3% and 1.4%. The pan-continental Stoxx Europe 600 added 0.29%. Spain’s IBEX35 was the strongest performer as it closed higher by 1.39%.

Stocks across Europe opened for trading on Tuesday in the red as investors struggled to maintain their optimism after yesterday’s push to the upside.

After hitting a three-week low last week, the Stoxx 600 snapped a four-day losing streak on Monday.

Bitcoin Keeps Firm Above $45,000

Cryptocurrencies like Bitcoin are aiming higher early Tuesday. Following choppy trading on the first day of the week, bitcoin is changing hands at $45,700. Ether, the second-largest digital currency, is struggling to break above $3,300 per coin.

The digital asset market is holding steady above $2tn market valuation. Bitcoin commands a market cap of more than $850bn, or a market share of roughly 41%.

What Could Move Markets Today

Traders and investors today will be looking to get fresh clues about the economic recovery in the latest US inflation report. The US consumer price index (CPI) will show whether inflation contracted or expanded in August.

The report could create heightened volatility and trading opportunities in the movement of the US dollar. The EUR/USD, currently hovering around 1.1800, could see increased momentum on either side, depending on the inflation prints. Safe haven currencies such as the Japanese yen and the Swiss franc could also see increased trading volumes at the time of the CPI release.

In tech, Apple shares are keeping firm in pre-market hours as investors expect the Apple launch event. The iPhone maker will roll out the iPhone 13 and the Apple Watch Series 7 today. Watch out for surprises as there have been talks about smart glasses and cars.

In cryptocurrencies, the Securities and Exchange Commission Chairman Gary Gensler will appear before the Senate Banking Committee to be questioned on cryptocurrency protection and regulatory frameworks over crypto markets.