Dow Soars to New High as Yen Plunges on Historic Intervention

The Dow Jones Industrial Average notched a record high close on Monday, driven by solid manufacturing data and optimism around earnings and US-Iran peace hopes. The yen plummeted to a three-month low after a historic bout of coordinated US-Japanese intervention in the foreign exchange market.

According to reports, Japan spent almost $100 billion over a 48-hour period last week in FX intervention to support the yen, with estimates suggesting it has spent around $310 billion over the past four years defending its currency. However, whether this intervention has been effective is subjective, as the demand for the yen may have prevented a much weaker and more volatile currency.

Meanwhile, Wall Street showed resilience in the face of recent market volatility, with the S&P 500 rebounding to within 0.5% of its record high and the Dow notching a fresh record-high close. Investors are taking their cue from the earnings picture, which could hardly be more bullish.

Factory activity expanded in July at its fastest pace in over four years, with US factory activity, euro zone output, and Japan's manufacturing PMI all showing strong growth.