The Dow Rises to a Record High—and What Else Is Happening in the Stock Market Today

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The Federal Reserve’s monetary-policy body will meet this week.

Mark Wilson/Getty Images

The Dow Jones Industrial Average was rising to new heights after the U.S. agreed to a deal with the European Union to reduce tariffs as investors wait to hear from the Federal Reserve on Wednesday.

In morning trading, the Dow gained 74 points, or 0.2%, while the S&P 500 was little changed and the Nasdaq Composite was up 0.1%. All three indexes ended Friday at record highs.

Most stocks were rising. The Invesco S&P 500 Equal Weight Exchange-Traded Fund (RSP), which weights each stock in the index equally and therefore shows the breadth of stocks rising or falling, was up 0.5%

The markets are getting a boost after the EU and the U.S. agreed to settle a trade dispute on steel. The Biden administration said it would allow an amount of steel and aluminum products to enter the U.S. from the EU without tariffs, while keeping tariffs on some amount of those goods. The EU will drop tariffs it had placed on certain American goods moving into the EU. 

“Futures are modestly higher on tariff reduction,” wrote Tom Essaye, founder of Sevens Report Research before trading opened.  

In economic data Monday, the Institute For Supply Management’s manufacturing index came in at 60.8 for October, beating estimates, but losing some steam from September.

The week, though, will be dominated by the Federal Reserve and the latest meeting of the Federal Open Market Committee (FOMC), its monetary-policy body. The central bank is expected to announce that it will begin slowing, or tapering, its Covid-19 pandemic-era program of monthly asset purchases, which add liquidity to markets, and markets could react to any substantial updates.

“I expect the FOMC to formally announce the start of its taper of quantitative easing, with the real question being, how much per month will it reduce, and will it show some spine and stay the course, even if markets correct lower,” said Jeffrey Halley, an analyst at broker Oanda. 

There will also be key announcements in the days ahead from the Bank of England and Royal Bank of Australia.

Earnings season continues apace, but with Big Tech out of the way will likely get less attention. This week, 162 S&P 500 companies will report, representing about 15% of the index’s market capitalization. Those include Pfizer (ticker: PFE), Qualcomm (QCOM), CVS Health (CVS) and Booking Holdings (BKNG). Already, almost three-quarters of the index’s market cap has reported, delivering an aggregate earnings per share beat of 10% compared with analyst expectations.

Overseas, the pan-European Stoxx 600 was 0.5% higher. Tokyo’s Nikkei 225 surged 2.6% following national elections over the weekend that saw the ruling party retain its majority in the lower house.

Here are five stocks on the move Monday:

Novavax (NVAX) shot up 4.5% after the biotech company said it filed for review of its Covid-19 vaccine candidate by Canadian health authorities.

Harley-Davidson (HOG) stock was rising 7.7% after the company said it no longer expects the adverse impact of higher tariffs

ON Semiconductor (ON) stock gained 12% after the company reported a profit of 87 cents a share, beating estimates of 74 cents a share, on sales of $1.74 billion, above expectations for $1.71 billion. 

Shake Shack (SHAK) stock rose 5.1% after getting upgraded to Buy from Hold at Truist. 

Lockheed Martin (LMT) stock fell 0.1% after getting downgraded to Neutral from Buy at Bank of America. 

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com