Early rally fades, stocks rise slightly

U.S. stocks pared gains in the final hour of trading, with a report that federal agents raided the offices of President Donald Trump’s lawyer adding to swoon. Equities finished higher on the strength of gains in technology shares that bore the brunt of last week’s decline. Treasuries were little changed.

The S&P 500 Index gave back all but 0.3 percent of an advance that approached 2 percent earlier in the day. Fears that China and the U.S. would escalate a trade war took a back seat Monday after equities rose in Asia and Europe, though shares in sectors that would be hit hardest by a trade spat underperformed. Strength in semiconductors, software and technology hardware pushed the Nasdaq 100 Index up more than 2.5 percent earlier in the session before paring that gain and finishing 1 percent higher.

“Despite recent concerns, trends for (tech) remain intact, and the sector remains a standout on both top- and bottom-line growth,” equity strategists at Credit Suisse Group AG led by Jonathan Golub wrote in a note to clients Monday.

The tech rally shifted focus from the implications of a trade fight between the world’s two largest economies, with investors also focused on earnings season, which starts later in the week and is expected to show growth of almost 20 percent. That’s not to say the trade issue has vanished. China was said to be reviewing ways to use its currency as a weapon as President Xi Jinping is set to deliver a speech Tuesday that may include a strong warning about the consequences of a prolonged dispute.

Still, currency moves, including a recovery in emerging markets, bore out the sense that calm may prevail.