U.S. stocks closed higher on Monday as investors awaited insights from the Federal Reserve’s upcoming policy meeting, with notable gains from Tesla and Apple driving market optimism.
The Federal Reserve’s policy meeting this week drew investors’ attention, with expectations that the central bank would maintain interest rates unchanged while adopting a potentially hawkish stance.
Tesla shares surged by 15.3% after the electric vehicle giant made significant strides in obtaining regulatory approval for its advanced driver-assistance program in China, the company’s second-largest market after the U.S.
Apple also saw a notable uptick, rising by 2.5% following reports of renewed discussions with OpenAI regarding the use of generative artificial intelligence (AI) technology. Bernstein’s upgrade of Apple’s stock to “outperform” further fueled investor confidence.
Despite gains in Tesla and Apple, other megacap stocks like Alphabet, Meta Platforms, and Microsoft experienced slight declines. Nvidia managed to close higher after recovering from early losses.
Nine out of 11 S&P 500 sectors finished higher, led by stocks in consumer discretionary, utilities, real estate, materials, and industrials. However, equities in communication services and financials faced modest losses.
Thomas Hayes, chairman at hedge fund Great Hill Capital in New York, emphasized the significance of the Fed’s tone regarding interest rates. Money markets are currently pricing in approximately 35 basis points of interest rate cuts for the year, reflecting a notable decrease from earlier projections.
The Dow Jones Industrial Average rose by 146.43 points, or 0.38%, to 38,386.09, while the S&P 500 gained 16.21 points, or 0.32%, to 5,116.17. The Nasdaq Composite also recorded gains, rising by 55.18 points, or 0.35%, to 15,983.08.
Shares of Domino’s Pizza witnessed a notable surge of 5.6% after surpassing expectations for first-quarter same-store sales. Paramount Global also gained traction, rising by 2.9% amid reports of potential changes in control, making the streaming firm more appealing to investors.
Bill Strazzullo, chief market strategist at Bell Curve Trading in Boston, highlighted the ongoing upward momentum in the market. With a flurry of earnings reports, the Fed meeting, and nonfarm payrolls on the horizon, investors remain optimistic about the market’s trajectory.
In currency markets, the Japanese yen strengthened against the dollar, prompted by reported interventions aimed at supporting the currency, which has been trading at levels last seen over three decades ago.
Advancing issues outnumbered decliners on both the NYSE and Nasdaq, reflecting a positive market sentiment. The S&P 500 and Nasdaq recorded new highs, underscoring the overall bullish sentiment among investors.
Volume on U.S. exchanges reached 9.98 billion shares, slightly below the 20-day average, indicating robust trading activity amid ongoing market developments.