Major U.S. Indexes Post Weakest Quarter of Year

The major U.S. equity markets finished higher on Monday with strong gains in Apple and Microsoft driving up the technology sector. Shares of Merck & Co. also rose. Optimism over the start of U.S.-China trade negotiations on October 10-11, after they collapsed three months ago, also helped underpin prices. Volume was relatively light as the market wrapped up the end of another quarter and as investors prepared for Friday’s U.S. Non-Farm Payrolls report that could determine Fed policy at the end of October.

In the cash market, the benchmark S&P 500 Index settled at 2976.74, up 14.95 or +0.53%. The blue chip Dow Jones Industrial Average closed at 26916.83, up 96.58 or +0.38% and the technology-based NASDAQ Composite ended at 7999.34, up 59.71 or +0.78%.

For the month, the S&P 500 Index rose 1.7%, the Dow added 2.1% and the NASDAQ Composite gained 0.5%. For the quarter, the S&P 500 Index and Dow moved up 1.2%, while the NASDAQ dipped 0.1%.

U.S.-China Trade Tensions Ease

U.S. stocks ended lower on Friday on reports that the White House is considering limiting U.S. investment into China, including a possible delisting of Chinese companies from U.S. stock exchanges.

In response to the report, Chinese state media called the potential restrictions “the latest attempt at decoupling” and warned of “significant repercussions for the Chinese and U.S. economies, as well as their companies, in the future.”

However, stocks rose on Monday after a Treasury spokeswoman said over the weekend that the Trump administration “is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time.” This statement, along with better-than-expected economic data out of China, lifted investor sentiment throughout Monday’s session.

Sentiment on Wall Street got an additional boost after White House trade adviser Peter Navarro dismissed reports that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges as “fake news.”

Tech Stocks Led by Apple

Shares of Apple Inc. rose 2.4% after Chief Executive Officer Tim Cook told a German daily that sales of the company’s newest iPhones were off to a strong start, while JP Morgan raised its forecast for shipment volumes. Apple is struggling to reverse shrinking iPhone sales amid tepid global demand for smartphones.

Apple shares were also supported by a price-target increase by an analyst at JP Morgan. The analyst’s new price target implies a more-than 20% increase for the tech giant over the next 12 months.

Weakest Quarterly Performance of Year

The major stock indexes ended September with the weakest quarterly performance so far this year, shaken by a host of factors including an escalation in U.S.-China trade sessions, the inversion of the 2-year/10-year yield curve and political turmoil in Washington.