By Haris Naeem
Growboo
Global markets surged on Monday, with U.S. and international stocks climbing to fresh highs while the dollar and Treasury yields slipped. Investors embraced a strong “risk-on” mood ahead of the Federal Reserve’s expected interest rate cut later this week.
The S&P 500, Nasdaq, Nikkei, and MSCI All Country Index all hit new peaks, with global stocks extending their winning streak to nine consecutive sessions. Alphabet jumped 4.5%, entering the $3 trillion market cap club, while Tesla gained 3.6% following Elon Musk’s $1 billion stock purchase. However, consumer staples and healthcare stocks fell more than 1%. Gold reached a record $3,685 per ounce, silver touched a 14-year high, and oil prices advanced 1%.
U.S.-China Trade Talks
Progress in U.S.-China relations added to optimism as both sides reached a framework deal for TikTok’s U.S. ownership. President Donald Trump also confirmed upcoming talks with Xi Jinping. At the same time, Beijing launched an anti-monopoly investigation into Nvidia, signaling ongoing friction.
Tech Sector Strength
Despite concerns over valuations, U.S. tech and AI stocks remain dominant. The communication services sector climbed 2.3% and is now up 27% in 2025, far outpacing the S&P 500’s 12% gain.
China’s Economic Strain
China’s latest economic indicators reinforced signs of weakness, with inflation, lending, retail sales, and industrial output all missing expectations. The shortfall raises pressure on Beijing to deliver further stimulus to meet its 5% growth target.
U.S. Housing and Labor Pressures
Domestically, the U.S. economy faces mounting challenges. Unemployment has risen to its highest since 2021, and job seekers now outnumber vacancies for the first time in four years. At the same time, housing affordability remains near record lows, with mortgage payments nearly double pre-pandemic levels. Treasury Secretary Scott Bessent has warned a national housing emergency could soon be declared.
Economists caution that rising unemployment and housing stress could create a “negative spiral” of weaker spending, falling profits, and more job losses. Limited housing mobility is compounding the problem, leaving some regions with worker shortages while others see unemployment rise.
Outlook
While declining bond yields have eased mortgage rates to an 11-month low, public sentiment remains pessimistic. Nearly 70% of Americans are worried about rising housing costs, a factor that may dampen consumer spending. Longer-term, increased housing investment could generate jobs and growth, but immediate relief appears unlikely.
Markets now turn to key data releases including U.S. retail sales, industrial production, and Canada’s inflation numbers, as well as the Fed’s rate decision later this week.
