Wall Street Rallies as Yields Fall and Apple Hits Record Highs

A Soft Landing in Sight?

The week started with Wall Street in a surprisingly good mood.

The Dow Jones rose 1.1%, the Nasdaq added 1.4%, and the mood across trading floors was notably more relaxed, a refreshing contrast after weeks of market jitters.

The reason? The 10-year Treasury yield briefly dipped below the psychological 4% mark, reaching its lowest level in over a year. When bond yields fall, equities - especially rate-sensitive tech stocks - tend to breathe easier.

Federal Reserve Chair Jerome Powell seems ready to deliver more monetary relief. Despite inflation still sitting above the 2% target, Powell pointed to a weakening labor market as justification for another rate cut and even hinted that the Fed’s balance sheet reduction program might soon pause. Translation: the era of tight money may be winding down faster than expected.

Apple’s iPhone 17 Fuels Record High

Apple (AAPL | +3.94%) stole the spotlight, surging to a record $262.24 after briefly touching $264 intraday.

What’s behind the excitement? Stronger-than-expected iPhone 17 sales, up 14% compared to last year’s model during the first ten days of launch in the U.S. and China. Loop Capital’s Ananda Baruah raised his price target to $315, calling this the start of Apple’s long-awaited upgrade cycle. Evercore chimed in with a $295 target.

Still, not everyone’s buying the hype. Jefferies analyst Edison Lee stuck to his sell rating, warning that iPhone momentum could cool quickly.

It’s a reminder that even at record highs, Apple - the most “human” of the Magnificent 7 - still faces scrutiny over its relatively slow push into artificial intelligence.

Precious Metals Shine as Geopolitics Cool

Gold ( +3.5%) climbed to a record $4,336 per ounce, while silver advanced 2% to over $51.

Those are eye-popping numbers and a signal that risk aversion hasn’t completely vanished.

Investors remain wary despite the improving tone between Washington and Beijing. U.S. Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng later this week in Malaysia, raising hopes for a thaw in trade tensions.

Meanwhile, President Trump confirmed plans to meet President Xi Jinping at the end of the month, quite the pivot after his recent threats of new import tariffs. It seems that diplomacy, at least for now, is back in vogue.

Cleveland-Cliffs Digs Up Opportunity

Cleveland-Cliffs (CLF | +21,47%) delivered one of the most eye-catching moves of the day.

The steelmaker announced it’s exploring whether its iron ore mines in Michigan and Minnesota might contain rare earth elements, critical materials for renewable energy and advanced technology. Investors loved the idea. The company’s stock skyrocketed despite a softer revenue figure, as CEO Lourenco Goncalves called the potential discovery “a strategic opportunity we can’t ignore.”

Rare earths have become the latest geopolitical chess piece between the U.S. and China. That makes any sign of a domestic supply source a potential game-changer and clearly, the market agrees.

Market Outlook

With the Fed tilting dovish, yields falling, and geopolitical tempers cooling, equities have regained their rhythm. But let’s not forget: the week has only just begun, and it’s loaded with heavy-hitters, Netflix (NFLX | +3.27%), Tesla (TSLA | +1.85%), Coca-Cola (KO | +0%), and Intel (INTC | +2.95%) are all reporting in the coming days.

Add in Friday’s delayed inflation report (still expected despite the ongoing government shutdown), and we have the recipe for another volatile week. I, for one, wouldn’t be surprised to see a few more record highs - and just as many knee-jerk pullbacks - before it’s over.

Song of the day

Given the tone of the day - optimism returning, yields falling, Apple breaking records, and Cleveland-Cliffs digging (literally) for rare earth metals - I’d go with “Don’t Stop Believin’” by Journey (1981).

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Kristoff - ChartMill

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