Dow Jones Industrial Average jumps 500 points as ISM manufacturing signals expansion
• The Dow Jones surged over 500 points on Monday as factory activity expanded for the first time in over a year.
• Oracle shares rallied after the company announced plans to raise up to $50 billion to expand cloud infrastructure.
• Gold and silver pared losses from Friday's historic crash, while bitcoin stabilized above $78,000.
• Friday's jobs report suspended as government shutdown keeps federal agencies underfunded.
The Dow Jones Industrial Average (DJIA) jumped 504 points, or 1%, on Monday as Wall Street began February on a strong note, shaking off concerns from last week's precious metals rout. The S&P 500 rose 0.7%, buoyed by gains in Oracle Corporation (ORCL) shares following the company's announcement of a massive cloud expansion funding plan. The Nasdaq Composite gained 0.8%. Investors looked past recent losses in silver and bitcoin to focus on upbeat manufacturing data and a solid earnings season, with strategists noting that double-digit profit growth for a fifth consecutive quarter could help ease valuation concerns.
ISM manufacturing surges into expansion territory
US factory activity in January expanded for the first time in a year, the Institute for Supply Management reported Monday. The ISM manufacturing index jumped to 52.6, a 4.7-point increase from December and well ahead of the Dow Jones consensus estimate of 48.4. Prior to this reading, the index had been in contraction territory, below 50, for 26 consecutive months. The new orders index leapt 9.7 points to 57.1, its highest level since February 2022, while production surged 5.2 points to 55.9. Employment improved by 3.3 points to 48.1, though it remained below the 50 threshold, indicating growth.
Oracle rallies on cloud expansion plan; Nvidia slips on OpenAI doubts
Oracle Corporation (ORCL) shares climbed after the company announced Sunday that it plans to raise between $45 billion and $50 billion during 2026 to build additional cloud infrastructure capacity for major customers including Advanced Micro Devices Inc. (AMD), Meta Platforms Inc. (META), and OpenAI. Meanwhile, Nvidia Corporation (NVDA) fell 1% after The Wall Street Journal reported that the chipmaker's plans to invest $100 billion in OpenAI had stalled, with executives expressing doubt about the deal. The contrasting moves highlighted ongoing uncertainty about artificial intelligence investment returns even as hyperscalers continue committing massive capital to data center buildouts.
Metals and crypto stabilize after Friday's historic rout
Gold and Silver came off their lows on Monday, helping ease risk-off sentiment across markets. Spot Gold fell 4% while spot Silver dropped 7%, paring steeper losses from Friday when silver plunged around 30% in its worst single-day performance since 1980, and gold tumbled roughly 10%. Bitcoin fell below $80,000 for the first time since April, then stabilized above $78,000. The cryptocurrency's decline reflected investors taking risk off the table following the sharp precious metals selloff, though the recovery in metals prices helped trim equity losses and calmed jittery markets.
Earnings season on track for strongest growth in four years
More than 100 S&P 500 companies are set to report this week, including Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOG), both of which traded higher Monday. Deutsche Bank strategists noted that earnings growth is on track to be the strongest in four years, with roughly 78% of reporting companies beating expectations, according to FactSet. The Walt Disney Company (DIS) reported results that topped analyst estimates but fell 4% after warning of headwinds from international travelers at domestic parks. The overall season has been solid despite some high-profile post-earnings declines, including Microsoft Corporation (MSFT).
Jobs report suspended amid ongoing government shutdown
The U.S. Bureau of Labor Statistics advised markets Monday that Friday's scheduled release of the January Nonfarm Payrolls report will be suspended until federal government operations resume. The agency's website noted that updates have been halted due to the suspension of federal services, with the last update occurring Monday. Late 2025 saw the longest government-funding freeze on record, and despite a short-term stopgap solution that provided operating cash through the end of January, Capitol Hill continues to struggle to reach a budgetary consensus, leaving key federal offices underfunded and economic data releases in limbo.
Dow Jones daily chart
S&P 500 FAQs
The S&P 500 is a widely followed stock price index which measures the performance of 500 publicly owned companies, and is seen as a broad measure of the US stock market. Each company’s influence on the computation of the index is weighted based on market capitalization. This is calculated by multiplying the number of publicly traded shares of the company by the share price. The S&P 500 index has achieved impressive returns – $1.00 invested in 1970 would have yielded a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.
Companies are selected by committee, unlike some other indexes where they are included based on set rules. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be greater than or equal to $12.7 billion. Other criteria include liquidity, domicile, public float, sector, financial viability, length of time publicly traded, and representation of the industries in the economy of the United States. The nine largest companies in the index account for 27.8% of the market capitalization of the index.
There are a number of ways to trade the S&P 500. Most retail brokers and spread betting platforms allow traders to use Contracts for Difference (CFD) to place bets on the direction of the price. In addition, that can buy into Index, Mutual and Exchange Traded Funds (ETF) that track the price of the S&P 500. The most liquid of the ETFs is State Street Corporation’s SPY. The Chicago Mercantile Exchange (CME) offers futures contracts in the index and the Chicago Board of Options (CMOE) offers options as well as ETFs, inverse ETFs and leveraged ETFs.
Many different factors drive the S&P 500 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the S&P 500 as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
