Wall Street Close: Stocks rally into the close for fresh all-time highs

• The S&P 500 and Dow both hit and closed at all-time highs on Monday, as buying accelerated into the close.
• The Nasdaq 100 was the best performer, however, as long-term yields dropped.
• Markets were fairly subdued, however, as participants await key events later in the week.

Not the most exciting day on Wall Street, but still a solid showing. The major indices, which were under pressure in early trade, rallied in the second half of the US session, with buying accelerating into the close. The S&P 500 surged in the final minutes of trade to close at all-time highs just under the 3970 level, up 0.6% – bulls will be targeting the 4K level by the end of the week.

Meanwhile, the Dow also rallied 0.6% to close at all-time highs, though just missed out on hitting 33K for the first time. The Nasdaq 100 was the best performer of the major indices, rallying 1.0%, though the index still remains about 5.75% below its all-time intra-day highs. The VIX dropped 0.61 to 20.08, only just above the post-pandemic lows it set in mid-February.  

In terms of sectoral performance; Big Tech and growth stocks benefited from a drop in long-term interest rates (the 10-year yield fell 3bps back to 1.60% and the 30-year yield dropped nearly 5bps to close to 2.35%). The S&P 500 Information Technology Index gained 0.8% - hence Nasdaq 100 outperformance. But the best performing sector was Utilities, up 1.1%. Financials dropped 0.9% amid lower yields and energy dropped 1.4% amid lower crude oil and natural gas prices.

Driving the day

US stock markets were understandably subdued given incoming key risk events later in the week, including US February Retail Sales on Tuesday and FOMC rate decision on Wednesday, as well as a plethora of other major central bank decisions on Thursday and Friday. But the bias remains towards more gains, as stock markets continue to benefit in the afterglow of the recently passed $1.9T stimulus package, which will send $1400 to each American (much of which is expected to be invested in the stock market), and amid ever improving US pandemic-related news (states continue to ease restrictions, infection and hospitalisation rates continue to drop and the vaccine rollout continues to accelerate).

In terms of fresh fundamental developments, there was not much to go off of; the New York Empire State Manufacturing Index for the month of February, one of the timeliest looks at how the US manufacturing sector is fairing this month, beat expectations, rising to 17.4 from 12.1 previously. Meanwhile, a lot of attention has been paid to a panicked halting of the AstraZeneca vaccine rollout in the EU amid fears the vaccine might be linked to higher rates of blood-clots, though UK and US officials maintain there is no causal link between the two and it most certainly does not look like the US will be slowing their vaccine rollout as the European nations are doing. Elsewhere, talk of higher corporation taxes to help fund the next infrastructure-focused stimulus package has not hindered stock market sentiment just yet.