USD Supported as S&P 500 Gains 1.6% Despite Late-Session Weakness

US equity markets posted strong gains on Monday with the S&P 500 rising 1.6%, the Nasdaq Composite surging 3.1%, and the DJIA adding 0.9%, creating a risk-on environment that typically supports USD strength against safe-haven currencies. However, late-session selling pressure tempered the bullish tone, particularly in the Russell 2000, which hit a record high but closed near its intraday lows despite gaining 0.9%. This weak close in small-cap stocks is notable as these companies benefit most directly from lower oil prices and stronger consumer spending, suggesting underlying concerns about domestic economic momentum. The divergence between tech-heavy Nasdaq outperformance and small-cap weakness may signal selective risk appetite rather than broad-based bullishness. For forex traders, the mixed signals suggest USD/JPY could face resistance on further upside attempts, while commodity-linked currencies like AUD and CAD may see limited gains if the risk rally lacks conviction. Traders should monitor whether small-cap weakness persists, as it could foreshadow a broader shift in market sentiment and dollar direction.