© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2024. REUTERS/Brendan McDermid/FILE PHOTO
By Bansari Mayur Kamdar and Shashwat Chauhan
(Reuters) -Wall Street’s main indexes rose on Monday, with a rally in megacap growth stocks such as Alphabet (NASDAQ:) and Tesla (NASDAQ:) supporting a sharp recovery in the tech-laden Nasdaq ahead of the U.S. Federal Reserve’s meeting this week.
Most market-leading growth stocks rallied, with Alphabet gaining 6.7% after a media report that Apple (NASDAQ:) is in talks to build Google’s Gemini AI engine into the iPhone.
The communication services sector jumped 3.6%, leading gains among the 11 major sectors.
Tesla rose 6.7% after the electric carmaker said it would increase the price of its Model Y EVs in some European countries on March 22, by approximately 2,000 euros ($2,177) or its equivalent in local currencies.
Focus will also be on AI-darling Nvidia (NASDAQ:), which kicks off its annual developer conference, with investors focused on new chip announcements from Chief Executive Jensen Huang in an afternoon keynote address. The chipmaker climbed 1.2%.
“The tail wind for the AI darlings sits with Nvidia’s annual artificial intelligence conference … an event that could be so important to the stock that it has been dubbed the ‘AI Woodstock’,” said Art Hogan, chief market strategist at B Riley Wealth.
Peers Micron Technology (NASDAQ:) and Intel (NASDAQ:) added 1.5% and 0.3%, respectively, while the Philadelphia Semiconductor index climbed 0.5%.
Wall Street, led by optimism around AI, hit fresh all-time highs in March, before pulling back some gains last week.
Stronger-than-expected inflation figures have prompted investors to rethink when and by how much policymakers will lower rates this year, with traders pulling back bets of a June rate cut to around 59% from 71% last week, according to the CME FedWatch Tool.
A hawkish tilt by the Fed in its policy meeting that concludes on Wednesday could further pressure the high-flying indexes.
Goldman Sachs on Monday said they now expect three interest rate cuts in 2024, compared with four expected earlier, after inflation came in a bit firmer than expected.
Exchange operator Nasdaq said it has resolved an issue related to connectivity and stock orders after more than two hours.
At 11:24 a.m. ET, the was up 180.81 points, or 0.47%, at 38,895.58, the S&P 500 was up 51.04 points, or 1.00%, at 5,168.13, and the was up 224.12 points, or 1.40%, at 16,197.29.
U.S.-listed shares of Xpeng (NYSE:) climbed 2.9% on the company’s plans to launch a cheaper EV brand amid fierce price competition.
Boeing (NYSE:) shed 1.0% after a media report that a federal grand jury in Seattle issued a subpoena to the planemaker over the Jan. 5 midair blowout of a Boeing door plug on an Alaska Airlines flight.
Super Micro Computer (NASDAQ:), which joined the S&P 500 on Monday, erased early gains and fell 5.6%.
Advancing issues outnumbered decliners by a 1.49-to-1 ratio on the NYSE and by a 1.20-to-1 ratio on the Nasdaq.
The S&P index recorded 32 new 52-week highs and no new lows, while the Nasdaq recorded 52 new highs and 78 new lows.
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