Dow soars 764 points to kick off October as US stocks surge on slide in US dollar and lower bond yields
- US stocks kicked off October with strong gains as all major market indices jumped over 2%.
- The surge came amid a decline in the US dollar and a slide lower in bond yields.
- The rally was initially sparked by the UK government's reversal of its tax-cut proposal.
US stocks soared on Monday, kicking off the new quarter with a near 3% gain for all three major market indices. The Dow Jones surged more than 800 points.
The gains came amid a slide in the US dollar, which fell about one quarter of a percent, as well as a sizable decline in bond yields. The initial rally was sparked by the UK government's about face on its controversial tax cut and fiscal stimulus plans.
UK finance minister Kwasi Kwarteng confirmed reports that the newly installed government, under Prime Minister Liz Truss, would abandon its planned tax cuts for the top earners. Investors had grown increasingly worried about the unfunded tax cuts and the potential implications for already elevated inflation.
"The first major U-turn within the first month of rule isn't exactly an encouraging start for Liz Truss' government," City Index analyst Fiona Cincotta said. "The move could potentially limit gains in sterling as the market frets over the government's ability to ride this storm out in a coherent manner."
Here's where US indexes stood at the 4:00 p.m. ET close on Monday:
- S&P 500: 3,678.43, up 2.59%
- Dow Jones Industrial Average: 29,490.03, up 2.66% (764.52 points)
- Nasdaq Composite: 10,815.43, up 2.27%
Here's what else was happening today:
- Oil prices jumped more than 5% as OPEC considers cutting its production output by more than 1 million barrels per day.
- The International Energy Agency warned that Europe needs to reduce its use of natural gas this winter to preserve its inventory as Russia could completely cut off supplies.
- Credit Suisse stock fell as much as 11% on Monday before paring nearly all of those losses after concerns mounted over the weekend that the bank was under considerable financial stress that's comparable to the 2008 implosion of Lehman Brothers.
- Kim Kardashian agreed to pay the SEC $1.3 million over undisclosed payments for Instagram posts that touted a cryptocurrency in June 2021.
- US home prices fell in August at the fastest rate since the Great Financial Crisis, according to data from Black Knight. The firm said median prices fell 0.98% in August.
- A UN trade group said advanced economies, like the US, need to pivot away from hiking interest rates as it could spark a global recession.
- Tesla stock fell more than 8% after the company reported third-quarter vehicle deliveries that missed analyst expectations.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil jumped 4.79% to $83.30 per barrel. Brent crude, oil's international benchmark, rose 4.24% to $88.75.
- Gold rallied 2.08% to $1,706.80 per ounce.
- The yield on the 10-year Treasury fell 17 basis points to 3.66%.
- Bitcoin rose 1.85% to $19,519, while ether jumped 1.86% to $1,315.
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