Investing.com – The S&P 500 eased from record intraday highs Monday, but remained supported as investors cheered news that Federal Reserve Chairman Jerome Powell was nominated for another term.
The S&P 500 rose 0.51%, and had earlier hit a record of 4,743.74, the Dow Jones Industrial Average added 0.77%, or 272 points, the Nasdaq fell 0.3%.
President Joe Biden nominated Jerome Powell for a second four-year term as U.S. Federal Reserve Chair and nominated Governor Lael Brainard to vice chair.
“Both Mr. Powell and Ms. Brainard have similar dovish views on monetary policy … but many believe that Ms. Brainard would promote tighter regulation of financial institutions,” D.A. Davidson said in a note. “For that reason, the Powell nomination has been viewed favorably by financial markets.”
Treasury yields jumped on the news, suggesting that some had been betting on Brainard, who leans more dovish, which would likely have led to a lower for longer approach on monetary policy.
The {{23705|United States 10-Year} jumped hitting 1.6%, helping to stoke a bid on banking stocks.
Energy stocks, meanwhile, followed oil prices higher after the OPEC+ warned it would reconsider plans at its meeting next week to increase production cuts should countries tap their strategic energy reserves.
The threat from OPEC comes just as reports suggested the U.S. is considering the release of oil from the Strategic Petroleum Reserve in tandem with other countries including Japan.
Tech, which was the standout performer last week, underperformed as the rise in yields soured sentiment on the sector.
Excluding Apple (NASDAQ:AAPL) big tech including Meta, formerly Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN), traded lower. Microsoft (NASDAQ:MSFT) was flat.
On the economic front, housing activity remained buoyant as existing home sales in October rose by more than 0.8%. This “doesn’t seem like a big increase, but it comes on the back of a 7% monthly gain in September and most forecasters were looking for some payback,” Jefferies said.
The ongoing melt-up on Wall Street could face some headwinds in the coming weeks as stocks are in overbought territory, though that is unlikely to hamper a seasonal rally into year end.
“Year-end seasonality typically favors stocks into Dec. 31, although we could experience some choppiness along the way due to overbought conditions,” Janney Montgomery Scott said in a note.
In other automotive news, Tesla (NASDAQ:TSLA) increased 3% after CEO Elon Musk said in tweet that the company would “probably” launch its Model S Plaid electric sedan in China early next spring.
General Motors (NYSE:GM), meanwhile, was up more than 4% after CNBC reported the automaker acquired a 25% stake in the Seattle-based boating start-up Pure Watercraft.
