By Mark DeCambre and Joy Wiltermuth
The Dow Jones Industrial Average, S&P 500 index and Nasdaq Composite on Monday advanced to back-to-back record finishes, starting the week the way the ended last week.
The record finish comes as investors await semiannual testimony from Federal Reserve Chairman Jerome Powell beginning Wednesday and a batch of economic reports throughout the week, the unofficial start of corporate quarterly results.
How did stock benchmarks end?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.00% rose 126.02 points, or 0.4%, to end at a record 34,996.18.
S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.95% added 15.08 points, or 0.4%, closing at a record 4,384.63, after touching an intraday high at 4,386.68.
Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.02% advanced 31.32 points, or 0.2%, finishing at a record 14,733.24, after establishing an intraday all-time high at 14,761.08.
On Friday , the Dow and S&P 500 finished the session at record highs, booking weekly gains of about 0.2% and 0.4%, respectively. The Nasdaq Composite finished the week at an all-time high with a 0.4% weekly gain.
What drove the market?
Major stock indexes rose to back-to-back closing records on Monday. The advance came ahead of a number of key events that could serve as catalysts later in the week, including the unofficial start of earnings season, which JPMorgan Chase & Co . /zigman2/quotes/205971034/composite JPM +1.92% will kick off Tuesday, Powell’s testimony on Capitol Hill, and fresh readings on inflation.
“People are thinking earnings are going to be strong and that may propel the market higher,” said John Carey, director of Equity Income at Amundi U.S., adding that, for now, earnings have overshadowed uncertainty in Washington over planned infrastructure spending and potentially higher corporate taxes.
“Most people seem to be focused on the strength of the economy and the possibility of better earnings to support stock prices, which are definitely at high levels,” Carey told MarketWatch.
Equity markets experienced a bout of turbulence last week before ending with a flourish, prompted partly by a drop in Treasury yields. Lower-bound rates for government debt had raised questions about the outlook for the U.S. economy in the recovery from the pandemic. The spread of the delta variant of COVID-19 has emerged as a concern, but so has the lofty valuations assigned to some segments of the market.
Questions about the Fed’s monetary policy in the face of growing evidence of percolating inflation also have been blamed for some of the rocky trading.
Yields for the 10-year /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -1.09% edged up less than a basis point to 1.362% on Monday, while the 30-year Treasury yields /zigman2/quotes/211347052/realtime BX:TMUBMUSD30Y -2.28% advanced by 1.2 basis points to 1.993%, near lows last seen in February.
Federal Reserve Bank of New York President John Williams told reporters Monday that conditions for scaling back its $120 billion a month bond-buying stimulus program have yet to be met.
Although inflation and peak growth concerns continue to percolate and worry U.S. households , some strategists said those concerns may be “over-hyped” for markets.
“Both the previous inflation concerns and the current peak growth concerns are likely over-extrapolated reflections of near-term trends that will not persist,” Glenmede’s team led by Jason Pride and Michael Reynolds, wrote in a Monday note.
“Markets may remain volatile as they attempt to adjust to the rapidlyevolving information flow during the ongoing recovery from the pandemic,” but those factors “should not be disruptive of markets longer term.”