US stocks hit records on Monday, thanks to strong employment data and breakthrough in Covid treatment. As such, the S&P 500 posted its longest winning streak since 2017, but the level is still below the high reached last week.
Largest gains were seen in small companies, energy producers and commodity companies.
Meanwhile, Nasdaq 100 lagged because Tesla stocks fell 3.1% after Elon Musk asked on Twitter whether he should sell 10% of his stake.
On a different note, last week's news stream, which included the passage of $ 550 billion infrastructure bill, washed away fears that high inflation and the Federal Reserve's plan to curb bond purchases could reverse economic growth.
Treatment results from Pfizer and the lifting of travel restrictions in the US have also fueled speculation that companies will continue to generate strong margins. But recent growth rates could make it difficult for stocks to rise without additional catalysts.
Piper Sandler chief market technician Craig Johnson said: "Fear over inflation and supply chain headwinds have been replaced by fear of missing out in the record-high rally. Robust demand and economic momentum continue to drive earnings growth. Coronavirus concerns have also dissipated amid vaccine developments and widespread inoculation rates."
Markets will keep a close eye on US consumer prices on Wednesday after US job growth last week saw a jump in average hourly wages. According to Bloomberg Intelligence, this value is expected to show that price pressures will be the highest in three decades amid supply chain bottlenecks and higher electricity costs.
Joanne Feeney, partner at Advisors Capital Management LLC, said: ""The support for the rise in the S&P is pretty solid. But that doesn't mean you don't have to pick and choose carefully."
Other key events for this week are:
- meeting of the Central Committee of the Chinese Communist Party (until Thursday);
- speech of San Francisco Fed President Mary Daly (Tuesday);
- data on China aggregate financing, money supply and new yuan loans (Tuesday);
- report on China PPI (Wednesday);
- data on US wholesale inventories, CPI and jobless claims (Wednesday);
- marked US bonds will be closed in observance of Veterans Day (Thursday);
- China singles day (Thursday).