Nasdaq leads Wall St higher ahead of Fed meeting; Nvidia kicks off AI conference
© 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) – The tech-heavy Nasdaq led gains amongst Wall Street peers on Monday ahead of the U.S. Federal Reserve’s meeting this week, where the central bank is expected to keep borrowing costs steady and provide cues on its monetary policy trajectory.
Most megacap growth stocks advanced, with Alphabet (NASDAQ:) gaining 6.4% after a media report that Apple (NASDAQ:) is in talks to build Google’s Gemini AI engine into the iPhone.
Tesla (NASDAQ:) rose 2.8% 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 kicked off its annual developer conference, with investors focused on new chip announcements from Chief Executive Jensen Huang in an afternoon keynote address. The chipmaker rose 3.8% in early trading.
Peers Micron Technology (NASDAQ:) and Intel (NASDAQ:) added 2.3% and 1.1%, respectively.
Stronger-than-expected inflation figures last week 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 Monday, according to the CME FedWatch Tool.
Nevertheless, Wall Street, led by optimism around artificial intelligence (AI), hit fresh all-time highs in March, before pulling back some gains last week.
A hawkish tilt by the Fed in its policy meeting that concludes on Wednesday could further pressure the high-flying indexes.
“(Investors) will be looking for more clarity if the broad market consensus opinion of a June rate reduction is still real, they are going to be interpreting the dot plot moving forward, seeing if there’s any broad modifications,” said Jamie Battmer, chief investment officer at Creative Planning in Kansas.
Goldman Sachs on Monday said they now expect three interest rate cuts in 2024 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 9:34 a.m. ET, the was up 150.05 points, or 0.39%, at 38,864.82, the was up 49.30 points, or 0.96%, at 5,166.39, and the was up 218.65 points, or 1.37%, at 16,191.82.
All 11 major S&P 500 sectors were trading higher, with communication services outpacing peers with a 3.1% jump.
U.S.-listed shares of Xpeng (NYSE:) climbed 7.4% on the company’s plans to launch a cheaper EV brand amid fierce price competition.
Boeing (NYSE:) shed 1.6% 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 joins the S&P 500 on Monday, climbed 6.3%.
Advancing issues outnumbered decliners by a 1.70-to-1 ratio on the NYSE and by a 1.30-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and no new lows, while the Nasdaq recorded 23 new highs and 27 new lows.
