US stocks rose overnight as investors built on the previous session’s historic move to record highs.

The Dow Jones Industrial Average climbed 138.01 points, or 0.36 per cent, to finish at 38,001.81. Monday's gains pushed the blue-chip average to a new record and above the 38,000 level for the first time. The S&P 500 added 0.22 per cent to 4,850.43, also reaching a fresh all-time high. The Nasdaq Composite advanced 0.32 per cent to 15,360.29.

Macy’s rose more than 3 per cent after rejecting a $5.8 billion proposal to take the retailer private. SolarEdge jumped more than 4 per cent on the back of the company announcing it would lay off 16 per cent of its workforce.

Archer-Daniels-Midland plunged more than 24 per cent after issuing weak earnings guidance and placing CFO Vikram Luthar on leave amid an investigation tied to accounting practices. B Riley Financial slipped around 2.5 per cent after Bloomberg reported that regulators are investigating deals with a client connected to securities fraud.

Tesla's stock dropped as Morgan Stanley lowered its target price to $345 from $380, citing concerns about a slowdown in the global electric vehicle market. Tesla's quarterly reports are due on Wednesday.

Sunoco is set to acquire NuStar Energy in a deal worth approximately $7.3 billion, including debt, as part of Sunoco's strategy to expand beyond motor fuel distribution. Shareholders of NuStar will receive 0.400 Sunoco shares per NuStar unit held, valued at $23.78 per share, representing a 31.9 per cent premium over NuStar's recent closing price.

Wall Street’s strength may depend on whether the U.S. central bank successfully engineers a soft landing, cooling the economy to lower inflation while avoiding a recession.

Traders are now pricing in a roughly 46 per cent chance of a Fed rate cut in March, according to CME Group’s FedWatch Tool. That marks a steep decrease from almost 81 per cent a week earlier. There’s a nearly 54 per cent likelihood that the central bank will keep rates steady, up from around 19 per cent one week prior.

Investors will be closely watching a slate of economic reports due out this week, including fourth quarter gross domestic product on Thursday and the Fed’s favourite inflation measure, December’s personal consumption expenditures price index on Friday. Both reports will help shape how Fed officials view monetary policy moving forward.

Overall, most US sectors closed higher overnight. Industrials was the best performer, whilst Consumer Discretionary was the worst.

Shifting to China, following a sharp decline in Chinese stocks, the government has announced plans to implement stronger measures to boost market confidence. This decision came after the CSI300 Index fell 1.6 per cent to a nearly five-year low, and the Shanghai Composite Index experienced its largest one-day drop since April 2022, sinking 2.7 per cent.

The President of the Democratic Republic of Congo is in talks with China about a $7 billion financing arrangement linked to the restructuring of a minerals-for-infrastructure deal. This move aims to address the DRC's dissatisfaction with the previous 2008 contract, which has provided limited benefits, leveraging the country's abundant mineral resources, including crucial green-energy metals like copper and cobalt.

Futures

The SPI futures are pointing to a flat start.

Currency

One Australian dollar at 8.30am was buying 65.69 US cents.

Commodities

Gold fell 0.36 per cent. Silver lost 2.29 per cent. Copper fell 0.99 per cent. Oil gained 2.42 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.35 per cent, Frankfurt gained 0.77 per cent, and Paris closed 0.56 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei gained 1.62 per cent, Hong Kong’s Hang Seng fell 2.27 per cent and China’s Shanghai Composite closed 2.68 per cent lower.

The Australian share market closed 0.75 per cent higher at 7,476.57.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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