U.S. stocks advanced on Monday, extending their November gains as investors continued to bet on the resilience of the technology sector and the prospect of stable economic growth into year-end. The Nasdaq Composite led the charge, rising 0.98% to 23,957.39, while the S&P 500 and Russell 2000 also posted solid gains, signaling growing investor confidence amid muted volatility.

The steady performance of U.S. equities reflects a risk-on sentiment that has carried over from last week, as traders digest a mix of encouraging earnings results and easing inflationary signals. The CBOE Volatility Index (VIX) remained flat at 17.44, suggesting that investors are positioning for gradual growth rather than major policy or market shocks.

Tech Drives Broader Market Confidence

Technology stocks once again powered the day’s rally, buoyed by optimism over strong semiconductor demand and resilient cloud software earnings. The Nasdaq’s near 1% rise highlights how market sentiment remains firmly anchored in the tech sector’s ability to generate profit and innovation despite a high-rate environment.

“Big tech continues to act as the market’s gravitational center,” said Lydia Tran, senior market strategist at Morgan Bay Capital. “Investors are rewarding operational efficiency and consistent growth in areas like AI, chips, and cloud infrastructure, while remaining cautious on traditional cyclicals.”

The S&P 500 gained 0.46% to 6,871.84, with strength across communication services and consumer discretionary adding to momentum. Meanwhile, the Dow Jones Industrial Average edged up 0.03% to 47,576.50, as value and industrial stocks lagged, underscoring the ongoing divergence between growth and cyclical sectors.

Small Caps and Broader Market Signals

Beyond mega-cap names, smaller companies showed renewed strength. The Russell 2000 rose 0.54% to 2,479.38, indicating that investor appetite may be expanding beyond the tech giants. Analysts view this as a constructive sign, suggesting expectations that interest rates have peaked, providing relief to rate-sensitive firms.

“The uptick in small caps is an important shift,” said Carlos Mendes, head of U.S. equities at Axis Partners. “It implies investors are starting to look at the broader economy — not just the headline tech stories — and that confidence is returning to segments most exposed to domestic growth.”

Global Context: A Calm Yet Watchful Market

In Canada, the S&P/TSX Composite Index edged up 0.05% to 30,274.90, led by gains in energy and financials. Brazil’s IBOVESPA also climbed 0.36% to 150,083.58, extending its recent rally amid optimism about moderating inflation and potential policy support for growth.

On the currency front, the U.S. Dollar Index strengthened 0.16% to 99.96, reflecting cautious positioning ahead of key U.S. economic indicators. Despite a firmer dollar, global equities have remained well-supported, aided by stable corporate earnings and a lack of new geopolitical shocks.

A Stable Risk Environment Ahead

The market’s calm tone reflects an investor psychology marked by cautious optimism. With the VIX anchored near mid-teen levels, traders appear confident that corporate fundamentals and softer inflation data will allow equities to maintain an upward trajectory into the final months of 2025.

Still, risks remain. The Federal Reserve’s policy path, upcoming labor market data, and fourth-quarter earnings revisions will test how long this equilibrium can last. Yet for now, the balance between economic resilience and monetary restraint seems to favor the bulls.

“As long as volatility stays contained and earnings remain steady, we could see this rally broaden further,” Tran added. “But if data surprises to the upside on inflation or wages, that calm could fade quickly.”