Dow Jones Industrial Average rises as ISM Manufacturing PMI expansion lifts sentiment
• The Dow Jones gained nearly 400 points on Monday as factory activity expanded for the first time in over a year.
• Oracle shares rose after the company announced plans to raise up to $50 billion to expand cloud infrastructure capacity.
• Gold and Silver pared steep losses from Friday's historic selloff, while Bitcoin stabilized around $78,000.
• Investors positioned ahead of a busy earnings week, with results due from Amazon, Alphabet, and Disney.
The Dow Jones Industrial Average (DJIA) climbed 400 points, or 0.8%, to 49,290 on Monday as Wall Street kicked off February on a positive note. The S&P 500 advanced 0.5%, while the Nasdaq Composite gained 0.6%. Investor sentiment was buoyed by a surprisingly strong ISM Manufacturing report that showed factory activity expanding for the first time in over a year, helping markets shake off concerns from last week's precious metals rout and ongoing uncertainty around Federal Reserve policy.
Manufacturing expansion signals economic resilience
The ISM Manufacturing Purchasing Managers Index (PMI) surged to 52.6 in January, jumping 4.7 points from December's reading of 47.9 and marking the first expansion in over two years following 26 consecutive months of contraction. The new orders index leapt 9.7 points to 57.1, its highest level since February 2022, while production climbed 5.2 points to 55.9. Employment remained in contraction territory at 48.1 but still managed to climb 3.3 points from the prior month. The data suggested that the manufacturing sector is finally gaining traction, providing reassurance to investors about the broader economic outlook heading into 2026.
Oracle announces massive cloud infrastructure funding
Oracle Corporation (ORCL) shares rose roughly 2% after the company announced Sunday that it plans to raise between $45 billion and $50 billion during calendar year 2026 to expand its cloud infrastructure capacity. The funding will come through a combination of debt and equity financing, with Oracle citing contracted demand from major cloud customers, including Advanced Micro Devices Inc. (AMD), Meta Platforms Inc. (META), Nvidia Corporation (NVDA), OpenAI, TikTok, and xAI.
The announcement underscores the scale of investment required to meet growing demand for artificial intelligence-related storage and compute solutions, even as some investors remain cautious about whether massive AI infrastructure spending will deliver meaningful returns.
Precious metals stabilize after historic selloff
Gold and Silver pared losses on Monday after Friday's dramatic rout, though volatility remained elevated. Gold futures fell around 4.5% to approximately $4,700 per ounce after plunging as much as 10% earlier in the session, while Silver dropped about 6% after sliding 16% earlier. Friday's selloff saw silver crash nearly 30% in its worst single-day performance since 1980, triggered by President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair.
Adding to metal traders' woes, the CME Group raised margin requirements for Gold and Silver futures effective after Monday's closing bell, with Gold margins increasing to 8% from 6% and Silver margins rising to 15% from 11%.
Bitcoin steadies as investors weigh earnings week
Bitcoin traded just below $78,000 on Monday after dropping below $80,000 over the weekend for the first time since April 2025. The cryptocurrency has declined roughly 40% from its 2025 peak amid fading demand and thinning liquidity, with spot ETFs recording net outflows of $1.6 billion in January. Meanwhile, Advanced Micro Devices (AMD) shares surged more than 5% as investors positioned ahead of the chipmaker's quarterly earnings report due Tuesday after market close. Analysts expect AMD to post earnings of $1.32 per share on revenue of approximately $9.67 billion, representing 26% year-over-year growth.
Heavy earnings calendar dominates week ahead
More than 100 S&P 500 companies are scheduled to report earnings this week, including high-profile results from Amazon.com Inc. (AMZN), Alphabet Inc. (GOOG), and The Walt Disney Company (DIS). Alphabet will report after Wednesday's close, with analysts projecting fourth-quarter earnings of $2.58 per share. Amazon is expected to post earnings of $1.97 per share for the holiday quarter. On the economic front, Friday's January employment report will be closely watched for signs of labor market strength, with economists forecasting payrolls to have added 65,000 jobs and the unemployment rate to hold steady at 4.4%.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA 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.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
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