Closing Recap

U.S. stocks staged a broad and powerful rebound, erasing a significant portion of Friday’s sharp losses as investors bought the dip and focused on increased prospects for a Fed rate cut; oil prices fell on OPEC+ supply news, gold rallied, the dollar was mixed, and Treasury yields were little changed. 

Key Takeaways 

• Strong Rebound After Friday’s Rout: Equities surged (S&P +1.47%, Nasdaq +1.95%) in a steady “melt-up” session, recovering much of the ground lost during Friday’s sell-off. 
• Rate Cut Hopes Fuel Rally: The rally was fueled by the market’s positive interpretation of lower interest rates, with Fed fund futures pricing in higher odds of a September cut following Friday’s weak jobs report. 
• “Buy the Dip” Mentality Persists: Investors once again showed a strong appetite for buying on weakness, despite the S&P 500 suffering its worst weekly decline in months last week. 
• Volatility Eases Sharply: The CBOE Volatility Index (VIX) plunged over 13% back below 20, signaling a significant reduction in fear. 
• Oil Prices Fall on OPEC+ Output Hike: Crude oil prices declined after OPEC+ agreed over the weekend to another large production increase for September, adding to oversupply concerns. 
• Gold Rallies: Gold prices rebounded, benefiting from lower rate expectations and potential safe-haven interest. 
• Yields & Dollar Mixed: Treasury yields were little changed after last week’s sharp drop, while the U.S. dollar was mixed against major currencies.

Market Overview

U.S. equity markets started the new week on a decidedly positive note, with a slow and steady rally throughout the day that saw major indices recover a large portion of the losses from Friday’s sharp, tariff-and-jobs-report-induced sell-off. The “buy the dip” mentality, which has been a dominant theme since April, was once again on full display as investors stepped in to snap up beaten-down stocks. The CBOE Volatility Index (VIX), which had spiked above 20 on Friday, tumbled over 13%, signaling a significant easing of investor anxiety. 

Index	Up/Down	% Change	Last
DJ Industrials	585.06	0.0134	44173
S&P 500	91.93	0.0147	6329
Nasdaq	403.45	0.0195	21053
Russell 2000	45.39	0.0209	2212

The primary driver of today’s optimism appeared to be the market’s reaction to Friday’s shockingly weak July jobs report and its significant downward revisions. While initially negative, the data has solidified expectations that the Federal Reserve will be forced to cut interest rates, likely as soon as its September meeting. This prospect of easier monetary policy has seemingly outweighed immediate concerns about a slowing economy. 

It was a quiet day for market-moving headlines. There was no significant new tariff news, and the lone economic data point (June factory orders) was largely in line with expectations. All three major indices, which had posted their worst weekly declines in months last week, began the process of clawing back those losses. Investors now look ahead to a very busy week of corporate earnings, with over 100 S&P 500 companies set to report, which will provide crucial insights into corporate health and guidance for the remainder of the year.

Economic Data

Yesterday’s economic calendar featured June factory orders, which came in largely as expected, showing a decline driven by volatile transportation orders. 

• Factory Orders (June): Fell -4.8% m/m (in-line with consensus, vs. +8.3% May). 
• Ex-transportation, orders rose +0.4%. 
• Ex-defense, orders fell -4.7%. 
• Durables orders revised to -9.4%. 

Commodities, Currencies, and Treasuries 

Gold prices rebounded, with the new front-month December contract gaining $26.60 (+0.77%) to settle at $3,426.40 per ounce. The move was likely supported by the firming expectations for a Fed rate cut and some underlying safe-haven interest. Crude oil prices fell, with WTI down $1.04 (-1.54%) to settle at $66.29/bbl. The decline was driven by news over the weekend that OPEC+ agreed to another substantial production increase of 547,000 bpd for September, adding to concerns about oversupply, especially in light of recent U.S. data showing lackluster fuel demand. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-1.04	USD/bbl	66.29
Brent	-0.91	USD/bbl	68.76
Gold	26.6	USD/oz	3426.4
EUR/USD	-0.0014	USD	1.157
USD/JPY	-0.4	JPY	146.96
10-Year Note	-0.021	%	0.042197

The U.S. dollar was mixed, easing against the Japanese Yen but gaining slightly against the Euro. Treasury yields were little changed across the curve after tumbling last week, with the 10-year yield settling near 4.22% as the market digested the cooling economic outlook.

Looking Ahead 

The market will be heavily focused on the heavy slate of Q2 earnings reports this week, which will provide a crucial test of corporate resilience amid signs of a slowing economy. With the Fed in a blackout period, investors will rely on upcoming economic data and earnings guidance to shape expectations for the September FOMC meeting. Any new developments on the trade/tariff front, particularly concerning India, also remain a potential source of volatility.