S&P 500 and Nasdaq close at highest since April 2022
The S&P 500 and the Nasdaq rallied on Monday to their highest closing levels since April 2022, while Oracle hit a record high ahead of quarterly results as investors awaited inflation data and the Federal Reserve’s interest rate decision this week.
Lifted by gains in market heavyweights Amazon, Apple and Tesla, the S&P 500 has now recovered 21 percent from its October 2022 lows. Some investors say Wall Street is in the midst of a bull market.
“The further out the October lows get in the rear view mirror, the more confident investors become. Have investors become more complacent? They probably have, and that’s actually a good sign,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.,
Tesla rose 2.2 percent and has now climbed for 12 straight trading sessions, a record for the electric car maker.
Apple and Microsoft each rose about 1.5 percent, with year-to-date gains in the two technology companies’ shares reaching 41 percent and 38 percent, respectively.
The S&P 500 climbed 0.93 percent to end the session at 4,338.93 points.
The Nasdaq gained 1.53 percent to 13,461.92 points, while Dow Jones Industrial Average rose 0.56 percent to 34,066.33 points.
Of the 11 S&P 500 sector indexes, eight rose, led by information technology, up 2.07 percent, followed by a 1.74-percent gain in consumer discretionary.
The U.S. Labor Department’s consumer price index reading on Tuesday is expected to show inflation cooled slightly in May, with core prices likely remaining sticky. Tuesday is also first day of the Fed’s two-day meeting.
Traders see a 76-percent chance of the central bank holding rates at the 5-5.25 percent range on Wednesday, while pricing in a 71-percent chance of a rate hike in July, according to the CME Fedwatch tool.
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“There’s a chance that the Fed will stay data dependent. So we don’t necessarily think that a rate hike is off the table in the future, but for the near term we just see them staying steady,” said Dylan Kremer, co-chief investment officer of Certuity.
Gains in megacap stocks, better-than-expected quarterly earnings and hopes that the Fed might be nearing the end of its monetary tightening cycle have lifted indexes in recent weeks.
The rally has recently widened to include more economically sensitive sectors such as energy and industrials, as well as small-cap stocks, as data continues to show a resilient U.S. economy despite higher interest rates.
Goldman Sachs on Friday raised its year-end price target for the benchmark S&P 500 to 4,500 from 4,000, citing the broadening of the market rally.
The CBOE volatility index edged up to about 14.8, its highest since last Tuesday.
After the bell, Oracle climbed 3.5percent following its quarterly report. In Monday’s trading session it rose as much as 7percent to an all-time high after J.P. Morgan hiked its price target.
Nasdaq Inc slumped almost 12percent after the exchange operator said it would buy software firm Adenza for $10.5 billion, which analysts called an expensive bet.
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Biogen rose 1.5percent after a U.S. FDA panel of advisers unanimously backed its Alzheimer’s drug, Leqembi, raising expectations that a traditional approval for the treatment might not come with major new safety warnings.
Broadcom Inc jumped 6.3percent after Reuters reported the chipmaker was set to gain conditional EU antitrust approval for its $61-billion proposed acquisition of cloud computing firm VMware. That helped lift the Philadelphia semiconductor index 3.3percent, bringing its recovery in 2023 to over 44percent.
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Advancing issues outnumbered falling ones within the S&P 500 by a two-to-one ratio.
The S&P 500 posted 24 new highs and three new lows; the Nasdaq recorded 107 new highs and 68 new lows.
Volume on U.S. exchanges was relatively light, with 10.2 billion shares traded, compared to an average of 10.6 billion shares over the previous 20 sessions.
