The stock market kicked off July’s first full week of trading with a strong start as the Dow gained more than 300 points on Monday.
Led by Caterpillar’s (CAT) more than 4% advance on Monday, the Dow rose 320 points, or 1.3%, to bring its year-to-date performance back into green figures for the year.
The S&P 500, Nasdaq, and Russell 2000 each lagged the Dow’s performance on a percentage basis.
Monday’s rally also came after the Trump administration officially imposed tariffs on $34 billion of Chinese imports with Beijing immediately retaliating.
Traders on the floor of the New York Stock Exchange said Monday that a clear takeaway from this rally in stocks is that, “many believe the risk of an all-out trade war has already been priced into the market — hence the risk-on mentality.”
On Tuesday, the economics calendar will bring investors the May report on job openings — which reached a record in April — and comes after Friday’s strong June jobs report showed the economy continues to create more than 200,000 jobs per month.
The NFIB’s latest small business optimism report is also out Tuesday morning. This report has been one of the strongest economic indicators since Trump’s election with businesses in June listing the inability to hire good workers as one of their biggest complaints.
As we noted on Monday, however, the continued ability for employers to hire and their reluctance to raise wages suggests there is more slack in the labor market than economists have argued, indicating that complaints about labor quality are more likely the perpetual frustration of business owners who want cheap, trained, and readily available labor.
And on the earnings side, PepsiCo (PEP) will be the only S&P 500 member reporting results, with analysts looking for the company to earn $1.52 per share on an adjusted basis with revenues expected to total $16 billion.
Investors will also take note of President Trump’s nominee to fill the Supreme Court vacancy left by the retirement of Justice Anthony Kennedy, which he is expected to announce at 9:00 p.m. ET Monday evening.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland