KEY POINTS

  • Microsoft gained 5.62% on reports that it is in talks to buy social video app TikTok
  • The Institute for Supply Management’s manufacturing PMI climbed to 54.2 in July
  • In Europe equity markets finished higher.

U.S. stocks jumped on Monday, the first trading day in August, on the strength of tech-heavy Nasdaq.

The Dow Jones Industrial Average gained 236.08 points to 26,664.40, while the S&P 500 rose 23.49 points to 3,294.61 and the Nasdaq Composite Index climbed 157.52 points to 10,902.80.

Monday’s volume on the New York Stock Exchange totaled 3.84 billion shares with 1,907 issues advancing, 130 setting new highs, and 1,091 declining, with 18 stocks setting new lows .

Active movers were led by Marathon Patent Group Inc. (MARA), ADT Inc. (ADT) and NIO Inc. (NIO).

Microsoft (MSFT) gained 5.62% on reports that it is in talks to buy social video app TikTok in the U.S.

“We’re seeing a rally in the tech sector really follow through from some of the earnings reports we saw last week,” said James Ragan, director of wealth management research at D.A. Davidson. “The S&P 500 is a bit above our estimate of fair value, though. If we look out down the road, you could certainly see the market trade higher, but we need better visibility” on the economy and the COVID-19 pandemic.

The Institute for Supply Management’s manufacturing PMI climbed to 54.2 in July, above a Dow Jones estimate of 53.8.

Investors were also focused on Washington, where lawmakers are still wrangling over a new COVID-19 relief stimulus bill. Republican and Democratic lawmakers are especially at odds over the size of the next weekly unemployment pandemic benefits check – Democrats favor a continuation of the $600 figure while Republicans seek a reduction to $200. Both sides agree on another round of $1,200 stimulus checks.

“Increased unemployment claims and decreasing consumer confidence show some deterioration of the U.S. consumer backdrop,” wrote Dennis DeBusschere, market strategist at Evercore ISI. “If an agreement to extend unemployment support passes soon, the nascent cyclical/risk-on rally from earlier in July can continue. Until then, risk-on factors will face headwinds despite the sharp decline in COVID net hospitalizations.”

Traders will also look at this Friday’s jobs report.

Overnight in Asia markets finished mixed, as China’s Shanghai Composite index rose 1.75%, Japan’s Nikkei-225 gained 2.24%, and Hong Kong’s Hang Seng exchange dropped 0.56%.

In Europe markets finished higher, as Britain’s FTSE-100 rose 2.29%, while France’s CAC-40 gained 1.93% and Germany’s DAX jumped 2.71%.

Crude oil futures rose 1.34% at $40.81 per barrel, Brent crude fell 0.54% at $43.91. Gold futures gained 0.38%.

The euro slipped 0.12% at $1.1766 while the pound sterling slipped 0.06% at $1.3077.

The yield on the 10-year Treasury surged 5.04% to 0.563% while yield on the 30-year Treasury jumped 3.92% to 1.245%.