The U.S. dollar finished the day mixed vs the major currencies.

The greenback was higher against 4 of the seven major currencies, posting its largest gain against the JPY (+0.45%). It rose vs the CHF by +0.25%), and the NZD by 0.12%. It eked out a small 0.04% rise vs the CAD (+0.04%).

On the downside, the greenback lost ground on the day vs the

EUR -0.03%
GBP -0.26%
AUD +0.22%

In the equity markets, the U.S. stocks kicked off the week on a strong note, with the Dow Jones Industrial Average closing at another record high while the Nasdaq led the major indices thanks to renewed strength in large-cap technology and semiconductor shares. The S&P 500 also finished solidly higher as investors returned from the holiday weekend in a risk-on mood. The rally came despite mixed market breadth, with leadership concentrated in AI and chip-related names.

On the economic front, the ISM Services PMI came in exactly as expected at 54.0, signaling that the U.S. service sector continues to expand at a healthy pace. While the headline matched forecasts, the details painted a constructive picture of the economy with business activity remaining resilient despite ongoing concerns over tariffs, fuel prices, and geopolitical uncertainty. The report reinforced the view that the U.S. economy continues to grow at a moderate pace.

Federal Reserve Governor Christopher Waller spoke on a panel from Italy and focused on monetary policy and communication. Waller defended the use of forward guidance, calling it a valuable tool that has strengthened monetary policymaking when used appropriately. At the same time, he emphasized that the Fed’s commitment to its 2% inflation target has never changed, pushing back against suggestions that policymakers have become less focused on price stability. His comments suggested the Fed remains committed to transparency while maintaining credibility in its inflation-fighting framework.

Markets showed little reaction to Waller’s remarks, with investors instead focusing on the broader earnings outlook and continued enthusiasm surrounding artificial intelligence-related stocks. This

Treasury yields were mixed with the shorter end lower and the longer end higher:

2 year yield 4.112%, -1.9 basis points
5 year yield 4.202%, -1.9 basis points
10 year yield 4.471%, -0.7 basis points
30 year yield 4.986%, +0.5 basis points.

Highlights

Dow closes at another record high, extending its recent run.
Nasdaq leads gains as semiconductor and AI stocks rebound sharply.
ISM Services PMI: 54.0 vs. 54.0 expected, pointing to continued expansion in the U.S. services sector.
Fed’s Waller: Forward guidance remains an important policy tool when used correctly.
Fed’s Waller: Policymakers remain fully committed to achieving and maintaining 2% inflation.

Investors now turn their attention to this week’s FOMC minutes and the unofficial start of second-quarter earnings season for the next major catalysts.