• Stocks rise as earnings and Fed decision offset political uncertainty
• Gold hits record above $5,100 as investors hedge fiscal and trade risks
• Earnings mostly beat, guidance cautious, focus turns to Fed rate outlook

US equities opened the week on a positive note, with the S&P 500 rising 0.5 percent as investors balanced political uncertainty against a heavy slate of earnings and an upcoming Federal Reserve (Fed) decision. The Dow Jones Industrial Average (DJIA) added 0.3 percent, while the Nasdaq Composite gained 0.6 percent, supported by strength in large technology names such as Apple (AAPL) and Meta (META) ahead of their earnings results. The advance followed a volatile prior week, during which the S&P 500 fell about 0.4 percent for a second straight weekly decline amid geopolitical tensions that later eased.

Political risk remained a key backdrop. Markets digested President Trump’s renewed tariff threats toward Canada tied to a possible expansive trade agreement with China, although Canadian officials pushed back strongly, reducing fears of immediate escalation. At the same time, tensions in Washington over federal funding and immigration policy raised concerns about a possible government shutdown, though Senate leadership signaled that a resolution may still be reached. While these issues have not yet triggered a sharp market reaction, the repeated use of trade and fiscal pressure tactics continues to weigh gradually on sentiment.

Political uncertainty and acquisitions lift Gold, economic backdrop holds firm

Safe-haven demand was evident on Monday, as Gold surged to a new all-time high above $5,100 per ounce, reflecting investor caution over political and fiscal risks. Despite this, broader economic signals remain relatively positive. Consumer spending appears resilient, and corporate profitability remains solid, with companies continuing to invest heavily in areas such as artificial intelligence and productivity tools.

Novo Nordisk (NOVO) shares improved, bolstered by bank analysts suggesting the launch of oral Wegovy is expanding the obesity treatment market rather than cannibalizing injectable products. Novo Nordisk shares are up sharply this month, while competitor Eli Lilly (LLY) has lagged. In the commodities and materials sector, Gold miners benefited from the bullion rally, with Newmont (NEM) posting strong gains. Corporate activity also drove individual stocks, including USA Rare Earth (USAR), which jumped after the US government took a stake, and Allied Gold, which rose following a takeover agreement with Zijin Gold, which offered to buy out Allied at $44 per share in an all-cash offer, valuing the deal at $5.5 billion.

Earnings season is moving into a critical phase, with more than 90 S&P 500 companies reporting this week, including several megacap technology firms. Results have been broadly positive thus far, though not as strong as last quarter. About three-quarters of reporting companies have beaten earnings expectations, but again, revenue beats have moderated compared with the prior quarter. Guidance has been conservative, as is typical at this point in the season, and companies that beat both revenue and earnings have not been rewarded immediately in share price performance. Regardless, markets expect the overall earnings picture to remain decent as results broaden beyond financials and early reporters.

On the policy front, the Fed is set to announce its first rate decision of the year, with no change expected. Investor focus will be on forward guidance, particularly signals around the timing of potential rate cuts. Futures markets currently price in two quarter-point cuts by the end of 2026.

Dow Jones daily chart