In an exciting start to the week, U.S. stocks ended at a new record closing high on Monday. The surge was fueled by a late boost following the Treasury department's announcement of a reduction in its quarterly borrowing estimate. Investors also eagerly looked ahead to a busy week, which includes the first Federal Reserve monetary policy committee meeting of the year and eagerly anticipated quarterly reports from major tech companies.

Wall Street has been riding a wave of success, with three consecutive weekly gains primarily driven by the impressive performance of technology stocks and expectations for interest rate cuts. This week, the spotlight remains on tech giants such as Microsoft, Apple, Alphabet, Amazon, and Meta, as they prepare to unveil their earnings. Together, these companies account for a substantial 24% of the S&P 500's weightage, with Microsoft and Apple alone valued at over $3 trillion each.

Alongside the highly anticipated tech earnings, the Federal Reserve's monetary policy committee meeting, commencing on Tuesday and concluding on Wednesday, will be another major event shaping market sentiments. While markets widely anticipate the central bank to maintain the current interest rates, all eyes will be on the comments from Fed Chair Jerome Powell for any hints or indications regarding interest rate cuts. These expectations have been a key driving force behind the recent rally on Wall Street.

Ahan Vashi, the investing group leader of The Quantamental Investor, emphasized the significance of this week, stating, "Investor expectations going into mega-cap tech earnings this week are lofty, and any sort of disappointment could spark a corrective pullback." Vashi also highlighted the uncertainty surrounding the Fed meeting, cautioning investors to brace themselves for increased volatility. Despite the bond market already pricing in 5-6 rate cuts for this year, Vashi believes this positioning is overly aggressive given the Fed's guidance for only 3 rate cuts in 2024.

In other news, the U.S. Treasury released its estimates of privately-held net marketable borrowing for the January to March and April to June quarters. The Treasury expects to borrow $760 billion in privately-held net marketable debt for the former period—a slightly lower figure than the earlier estimate of $805 billion. The official quarterly refunding announcement from the Treasury is scheduled for Wednesday.

Against this backdrop, Treasury yields experienced a decline on Monday, with traders showing increased interest in bonds following the borrowing estimate news. The 30-year yield dropped 7 basis points to 4.32%, while the 10-year yield saw an 8 basis point decrease, reaching 4.08%. The shorter-end 2-year yield, which is more sensitive to interest rate changes, also decreased by 5 basis points, resting at 4.31%.

With the market reaching new all-time highs and major earnings reports on the horizon, investors are bracing themselves for a volatile but potentially rewarding week ahead.