US stocks started the week on a positive note, with the S&P 500 index rising 0.5% as investors balanced political uncertainty with forceful earnings results and an upcoming Federal Reserve (Fed) decision. The Dow Jones Industrial Average (DJIA) rose 0.3 percent while the Nasdaq Composite gained 0.6 percent, helped by strength from large tech companies like Apple (AAPL) and Meta (META) ahead of their earnings results. The gain followed a volatile previous week during which the S&P 500 fell about 0.4 percent, marking its second straight weekly decline amid geopolitical tensions that later eased.
Political risk remained a key backdrop. Markets digested President Trump’s renewed tariff threats against Canada over a possible expansionary trade deal with China, although Canadian officials responded firmly, reducing fears of immediate escalation. At the same time, tensions in Washington over federal funding and immigration policy have raised concerns about a possible government shutdown, although Senate leadership has signaled a resolution could still be reached. While these issues have not yet triggered a keen market reaction, repeated trade and fiscal pressure tactics continue to gradually negatively impact sentiment.
Political uncertainty and takeovers drive gold levels higher, economic situation remains unchanged
Safe-haven demand was evident on Monday as the price of gold rose to a fresh record high above $5,100 an ounce, reflecting investor caution about political and fiscal risks. Still, broader economic signals remain relatively positive. Consumer spending appears resilient and corporate profitability remains solid, with companies continuing to invest heavily in areas such as artificial intelligence and productivity tools.
Shares of Novo Nordisk ( NOVO ) improved, boosted by banking analysts suggesting that the launch of oral Wegovy is expanding the obesity treatment market rather than cannibalizing injectable products. Novo Nordisk shares have surged this month while competitor Eli Lilly (LLY) has lagged. In the commodities sector, gold miners benefited from a rally in bullion prices, with Newmont (NEM) reporting forceful gains. Corporate activity also drove shares of individual companies, including USA Rare Earth (USAR), which jumped after the U.S. government took a stake, and Allied Gold, which rose on the back of a takeover deal with Zijin Gold, which offered to buy Allied at $44 a share in an all-cash offer, valuing the deal at $5.5 billion.
Earnings season is entering a critical phase, with more than 90 S&P 500 companies reporting this week, including several large-cap technology companies. So far, results are broadly positive, although not as forceful as last quarter. About three-quarters of reporting companies exceeded earnings expectations, but in this case revenue growth was moderate compared to the previous quarter. Guidance was conservative, as is typical at this point in the season, and companies that exceeded both revenues and earnings were not immediately rewarded with share price performance. Regardless, markets expect the overall earnings picture to remain decent as performance moves beyond financials and early reports.
On policy, the Fed is expected to announce its first interest rate decision this year, with no changes expected. Investors’ attention will be focused on forward-looking guidance, in particular on signals regarding the timing of potential interest rate cuts. Futures markets are currently pricing in two quarter-point cuts by the end of 2026.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock indexes in the world, consists of the 30 stocks most frequently traded in the United States. The index is price-weighted, not capitalization-weighted. It is calculated by summing the prices of the company’s shares and dividing them by the coefficient, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years, it was criticized for not being representative enough because it only tracks 30 conglomerates, as opposed to broader indexes such as the S&P 500.
Many different factors influence the Dow Jones Industrial Average (DJIA). The most essential are the total results of the companies included in the group, disclosed in quarterly reports on the companies’ results. Macroeconomic data from the United States and around the world also matters because it influences investor sentiment. The level of interest rates set by the Federal Reserve (Fed) also affects the DJIA because it influences the cost of borrowing, on which many corporations depend heavily. Therefore, inflation may be a major factor, along with other indicators, that influence Fed decisions.
Dow Theory is a method of identifying the main trend in the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and Dow Jones Transportation Average (DJTA) and only track trends where both are heading in the same direction. Volume is a confirmatory criterion. The theory uses elements of peak and trough analysis. Dow Theory assumes three phases of a trend: accumulation, when astute money starts buying or selling; public participation when wider society is involved; and distribution when the astute money comes out.
There are many ways to trade the DJIA. One is the exploit of ETFs, which allow investors to trade the DJIA as a single security rather than buying shares of all 30 companies that comprise it. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts allow investors to speculate on the future value of the index, and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds allow investors to purchase a portion of a diversified portfolio of DJIA stocks, thereby providing exposure to the entire index.
