U.S. stocks closed higher Monday, with the Dow Jones Industrial Average bouncing back from a four-session losing streak, as investors looked beyond the threat of a global trade war and instead focused on positive economic data.
A technical rebound following a stretch of weakness for equities also helped to support broad market gains.
What did the main benchmarks do?
The Dow /zigman2/quotes/210598065/realtime DJIA +1.54% bounced back from an earlier decline to rise 336.70 points, or 1.4%, to 24,874.76.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.62% rose 29.69 points, or 1.1%, to 2,720.94, with all 11 subsectors finishing higher, led by utilities and financials. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.31% added 72.84 points, or 1%, to 7,330.70.
Last week, stocks logged hefty losses, with the Dow dropping 3% and notching its fourth-straight-session loss on Friday. The S&P 500 shed 2% for the week and the Nasdaq declined 1.1%.
What drove the markets?
Rattling some investors was news that Sunday’s Italian election is expected to end in a hung parliament, as populist euroskeptic parties made a better showing than forecast. That is seen as signaling a protracted period of political uncertainty for the eurozone’s third-biggest economy.
But in Germany, Social Democrats voted to support a grand coalition government. That means Chancellor Angela Merkel will serve a fourth term and the country is set to have a government after more than five months of uncertainty.
Fears over the potential for global trade war continued after President Donald Trump said last week he will impose a 25% tariff on steel imports and a 10% tariff on aluminum. Those metals are used for products such as airplanes and beverage containers, and tariffs raise fears of an increase in selling prices or reductions in profits for U.S. corporations in those industries.
Trump continued to tweet on the subject over the weekend, at one point threatening to slap a tariff on European autos, should the European Union try to retaliate to the new tariffs. He tweeted Sunday evening that the U.S. is “on the losing side of almost all trade deals. Our friends and enemies have taken advantage of the U.S. for many years.”
Trump’s trade adviser, Peter Navarro, on Sunday blamed the media for hyping the possibility of a trade war. Trump on Friday had tweeted that “trade wars are good, and easy to win.”