If there was any doubt that the stock market rally was following both policy expectations and news coming from the new White House administration, the markets’ response Monday should put those doubts to rest.
Stocks gapped lower at the opening bell, after a tumultuous weekend news cycle that saw President Trump’s executive order to restrict immigration from seven countries, among other things.
Though still finishing lower on the day, the major averages went on to recoup roughly half their early losses, with the Standard and Poor’s 500 declining 0.60 percent and the Nasdaq Composite falling 0.83 percent by the closing bell.
Most investors have been anxiously awaiting the new administration’s economic promises — such as tax reform — but after this weekend’s events, might be realizing that they will have to exercise more patience than expected.
A large number of companies will be reporting their quarterly earnings this week, which will give investors a better sense of the strength of the U.S. economy. On Wednesday, following the FOMC meeting, the Federal Reserve will release its guidance on interest rates. Though there is little chance the Fed will raise interest rates at this time, investors will be listening for any changes to the Fed’s expectation of raising interest rates roughly three times later this year.
For the week, only a select few commodities finished in positive territory, with the top-performing commodities led by the S&P GSCI Platinum index, up 1.38 percent over the past five trading days, followed by the S&P GSCI Lean Hogs index, higher by 0.66 percent. Most commodities finished the week in negative territory, with the largest losses seen in the wheat market.