FX.co ★ U.S. Stocks Remain Mostly Positive In Afternoon Trading

Stocks witnessed a mainly upward trend in early trading, continuing to display strong performance as the day advanced on Monday. This momentum has led the major indices to expand considerably on the rally that was observed at the end of the prior week.

Recently, both the Nasdaq and S&P 500 have hit new session highs. Precisely, the Nasdaq rose by 128.94 points or 0.8%, settling at 16,285.26. The S&P 500 increased by 36.67 points or 0.7%, standing at 5,164.46, while the Dow Jones Industrial Average climbed by 137.92 points or 0.4% to 38,813.60.

Stocks continue to thrive on the positive momentum observed over the past two trading sessions, fuelled in part by regenerated positivity regarding interest rates' outlook. A combination of relatively mild comments from Federal Reserve Chair Jerome Powell and slower-than-expected job growth in April has effectively dissolved short-lived worries about the potential of the Fed to raise rates.

Instead, investors have become more and more positive about a rate cut happening in the near future, with an estimated 83.5% probability that rates will drop by September, as indicated by CME Group's FedWatch Tool.

Still, overall trading activity is somewhat mellow due to the absence of significant U.S. economic data, causing some traders to hold back. The economic schedule is set to be relatively light throughout the coming week, but an initial reading on May's consumer sentiment and remarks from several Fed officials may draw some attention.

Regarding specific stocks, Bausch + Lomb shares have experienced a significant rise after Morgan Stanley boosted the eyecare company's stock rating from Equal Weight to Overweight. Paramount Global also saw a surge in share prices after it was reported by the New York Times that the media and entertainment giant has decided to engage in formal negotiations with a bidding group headed by Sony Pictures Entertainment and private equity heavyweight Apollo.

Conversely, Spirit Airlines shares have dropped significantly after reporting a larger than expected loss for the first quarter and providing a disappointing revenue forecast for the second quarter.

Sector-wise, gold stocks have continued to see significant gains, resulting in a 2.2 percent rise in the NYSE Arca Gold Bugs Index. This surge came amidst an increase in gold prices, with the June delivery of gold rising by $24.70 to settle at $2,333.30 per ounce.

Computer hardware stocks also made a considerable upward move, pushing the NYSE Arca Computer Hardware Index up by 2.0%. The stocks of semiconductors, brokerages, and housing are also noticeably gaining, moving up along with most other major sectors.

In terms of global trading, stock markets in the Asia-Pacific region, predominantly witnessed an upward movement on Monday, except for markets in Japan and South Korea, which remained closed for holidays. China's Shanghai Composite Index showed a rally of 1.2%, while Hong Kong's Hang Seng Index rose by 0.6%.

European major markets also saw a positive trend. The German DAX Index leaped by 1.0%, while both the French CAC 40 Index and the UK’s FTSE 100 Index rose by 0.5%.

In the bond market, treasures, after seeing initial gains, have leveled off. Consequently, the yield on the benchmark ten-year note which inversely relates to its price, has slightly increased by less than a basis point to 4.506 percent.