Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed Monday on higher ground, driven by a continued recovery in tech stocks and a U.S.-Bangladesh trade deal.
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Tech stocks continued to recover from a steep selloff spurred by the release of new plugins from Anthropic’s Claude CoWork that weighed heavily on software stocks. Microsoft (MSFT), ServiceNow (NOW), Oracle (ORCL), and Palantir (PLTR) all closed higher by over 2.5%.
Several Wall Street analysts pushed back against the competitive threat of AI to software, with Wedbush’s Dan Ives claiming that the “doomsday scenario” is “extremely overblown.” Crossmark Global Investments Chief Market Strategist Victoria Fernandez was more cautious, saying that software and AI can “co-exist on some level, but the question is how much pricing power gets put in these companies.” At the same time, Fernandez noted that software companies with strong balance sheets have presented compelling buying opportunities.
Meanwhile, the White House announced that the U.S. will lower Bangladesh’s reciprocal tariff rate to 19% from 20% after previously lowering the rate to 20% from 37%. In addition, tariffs on a to-be-determined volume of certain textile and apparel goods from Bangladesh will be exempt from tariffs. The volume will depend on the quantity of U.S. textile exports. In return, Bangladesh will provide preferential market treatment to several U.S. products, including chemicals, agricultural goods, industrial goods, and energy products.
“The Agreement will provide U.S. and Bangladeshi exporters unprecedented access to each other’s respective markets,” said the White House.
Elsewhere, Goldman Sachs (GS) expects initial public offering (IPO) activity to pick up this year, estimating IPO proceeds will total $160 billion, more than triple the $48 billion seen in 2025. Goldman Chief U.S. Equity Strategist Ben Snider added that the S&P 500 (SPX) tends to perform well when IPOs are plentiful, although subsequent returns following periods of elevated IPO volume have been lower on average.
Investors are gearing up for two major economic data reports this week. On Wednesday, the Bureau of Labor Statistics (BLS) will release January’s jobs report, which includes data on nonfarm payrolls and the unemployment rate. The BLS will then publish January’s Consumer Price Index (CPI) on Friday, providing investors and the Fed with a key measure of inflation.
The S&P 500 (SPX) closed with a 0.47% gain, while the Nasdaq 100 (NDX) returned 0.77%.