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Nasdaq and S&P notch record highs after Macron wins French election; stocks close little changed

The Nasdaq composite and S&P 500 notched new all-time intraday and closing highs on Monday despite a narrow trading range as investors digested Emmanuel Macron's victory over Marine Le Pen in the French presidential election.

The indexes broke above their respective record intraday highs shortly after the open and eked out a record close. The Dow Jones industrial average also closed marginally higher, with Apple contributing the most gains.

"It's a case that everyone had priced in, but people were still scared about another Brexit," said Chris Gaffney, president of EverBank World Markets.

Macron cruised to win the French presidency, securing at least 65 percent of the vote in the election's second round. Investors across the globe largely expected this outcome as most polls projected the 39-year-old to win.

"We had the big move after the first round two weeks ago," said Phil Orlando, chief equity strategist at Federated Investors. "The market never discounts the same thing twice and that's why we're treading water."

Equities around the world rallied following the first round of the French election on April 23.

This is the second bullet global markets have dodged from European elections. Earlier this year, the Netherlands far-right party — led by Geert Wilders — came in second place in Dutch elections, a disappointment considering the party led most polls leading up to the election.

Also, a Le Pen victory would have raised questions about France's future in the European Union and the euro zone.

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Mario Tama | Getty Images

The euro briefly climbed above $1.10 against the dollar for the first time in six months after Le Pen was defeated, before trading about half a percent lower at $1.093.

European equities fell broadly, with the pan-European Stoxx 600 index slipping 0.28 percent. The French CAC 40 index, meanwhile, dropped 1 percent.

"We expect the focus to shift to French legislative elections in June. These will be crucial for determining Macron's ability to implement his economic program, which includes labor market reforms that would make it easier for French businesses to hire and fire," strategists at the BlackRock Investment Institute said in a note Sunday.

"We are positive on European shares and see potential for renewed investor inflows as
focus returns to the region's improving growth," they said.

U.S. equities traded slightly lower for most of the session, but the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 10 and briefly dipped below 10.

Energy and consumer discretionary were among the best-performing sectors in the S&P. "Right now, some people are looking for value. It's some of the stuff that's lagged recently," said Craig Sterling, head of U.S. equity research at Pioneer Investments.

In U.S. economic news, St. Louis Federal Reserve President James Bullard and Cleveland Fed President Loretta Mester spoke before the open.

Mester — a known hawk in the Fed's policymaking committee — said in a speech: "We have met the maximum employment part of our mandate and inflation is nearing our 2 percent goal."

The Fed held off on raising rates at its meeting last week, but set the table for a June move. Market expectations for a rate hike next month were 83.1 percent on Monday, according to the CME Group's FedWatch tool.

Bullard, however, struck a more dovish note in his Monday remarks. He said that continued strong demand for safe assets along with sluggish growth in the U.S. workforce will hold down
U.S. interest rates for the foreseeable future.

In corporate news, Sinclair Broadcast will acquire Tribune Media for $3.9 billion, or $43.50 per share. The announcement sent Tribune's stock more than 6 percent higher and Sinclair's 2.8 percent higher.

Coach also agreed to buy Kate Spade for $2.4 billion, or $18.50 per share, in an effort to resonate more with younger consumers.

In total, there were more than $13 billion in announced U.S. mergers and acquisition deals Monday, said Richard Peterson, senior director at S&P Global Market Intelligence. However, he also said announced deal value for this year is down about 2 percent from 2016.

Wall Street also parsed through key economic data out of China, as the country's exports and imports failed to meet expectations for April.

Peter Cardillo, chief market economist at First Standard Financial, said global investors will be more concerned about China's economy "if there is further evidence of a slowdown."

"You can't have the second-largest economy in the world [slowing down] without having the global economy feeling a pinch," Cardillo said.

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DJIA
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S&P 500
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NASDAQ
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The Dow Jones industrial average rose 5.34 points, or 0.03 percent, to close at 21,012.28, with Apple leading advancers and DuPont lagging.

The S&P 500 gained 0.09 points to end at 2,399.38, with energy leading four sectors higher and materials underperforming.

The Nasdaq advanced 1.90 points, or 0.03 percent, to 6,102.66.

About four stocks declined for every three advancers at the New York Stock Exchange, with an exchange volume of 836.41 million and a composite volume of 3.415 billion at the close.

—Reuters contributed to this report.

On tap this week:

What to watch

Monday

2:00 p.m. Senior loan officer survey

Tuesday

Earnings: Disney, Priceline, News Corp, SeaWorld, Liberty Media, TrueCar, TripAdvisor, Electronic Arts, Wayfair, Dean Foods, Allergen, Aon, Duke Energy, Discovery Communications, Hostess Brands, Blue Buffalo

6:00 a.m. NFIB survey

9:00 a.m. Minneapolis Fed President Neel Kashkari

10:00 a.m. Wholesale trade

10:00 a.m. JOLTs

4:15 p.m. Dallas Fed President Rob Kaplan

Wednesday

Earnings: Toyota Motors, Mylan Labs, we, Norwegian Cruise Lines, Pershing Square, Snap, Whole Foods, Sunrun, Time Inc, SodaStream, Royal Ahold, Vulcan Materials, Ambac, 21st Century Fox, Sotheby's

8:30 a.m. Import prices

1:30 p.m. Minneapolis Fed's Kashkari

2:00 p.m. Federal budget

Thursday

Earnings: Nordstrom, , Teva Pharma, Macy's, Kohl's, Nissan, Telefonica, CyberArk Software, Schneider National, BT Group, ING, Invitation Homes

6:25 a.m. New York Fed President William Dudley

830 a.m. Jobless claims

8:30 a.m. PPI

Friday

Earnings: Allianz, ArcelorMittal, JCPenney, Acushnet

8:30 a.m. Retail sales

8:30 a.m. CPI

9:00 a.m. Chicago Fed President Charles Evans

10:00 a.m. Consumer sentiment

10:00 a.m. Business inventories

12:30 p.m. Philadelphia Fed President Patrick Harker