The S&P 500 and Nasdaq climbed on Monday, with chipmakers and energy stocks leading a rebound as investors shrugged off geopolitical risks and assessed the outlook for U.S. monetary policy.
After a subdued start on Monday, stocks picked up some momentum, with energy stocks (.SPNY) jumping 1.3% as oil prices steadied following an aborted revolt by Russian mercenaries over the weekend, which the market did not view as an immediate threat to oil supply.
Technology (.SPLRCT) and real estate sectors (.SPLRCR) were the other top gainers among the 11 major S&P 500 sectors.
A recent rally in U.S. stocks sputtered last week, and the tech-heavy Nasdaq snapped its eight-week winning streak on Friday, after Fed Chair Jerome Powell signaled more interest rate hikes ahead.
“The way investors buy or sell right now is going to be relative to the assumption that they’re going to get a rate hike at the end of the next month,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab.
“All of the data we get between now and then, especially the labor market data and the inflation, data will have an impact on that (rate expectations).”
Market participants are awaiting a slew of economic data including a key inflation gauge, durable goods and University of Michigan’s consumer sentiment index, as well as Powell’s speech later this week for cues on how much longer the Fed will hike rates.
Most policymakers see at least two more quarter-point rate increases by the end of this year, though traders expect one more hike in July and see the U.S. central bank holding rates steady through the end of 2023, according to CMEGroup’s Fedwatch tool.
At 10:27 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 19.60 points, or 0.06%, at 33,707.83, the S&P 500 (.SPX) was up 6.90 points, or 0.16%, at 4,355.23, and the Nasdaq Composite (.IXIC) was up 51.68 points, or 0.38%, at 13,544.20.
Among single stocks, Pfizer Inc (PFE.N) shed 5% after the drugmaker said it is discontinuing the development of an experimental obesity and diabetes drug due to elevated liver enzymes in patients in clinical studies.
Alphabet Inc (GOOGL.O) fell 1% after UBS downgraded the stock to “neutral”, while Tesla Inc (TSLA.O) slipped 0.8% after Goldman Sachs cut the electric car maker’s rating to “neutral”.
Lucid Group (LCID.O) jumped 13.7% after entering into an agreement with UK’s Aston Martin (AML.L) that will give the electric vehicle maker a 3.7% stake in the company.
PacWest (PACW.O) added 4.6% after private-equity firm Ares Management (ARES.N) said it had acquired a $3.5 billion specialty finance loan portfolio from the lender.
Defense firms including Lockheed Martin (LMT.N), Northrop Grumman Corp (NOC.N) and Raytheon Technologies (RTX.N) slid between 0.9% and 2.0% following the aborted revolt in Russia.
Carnival (CCL.N) fell 9.7% after the cruise operator forecast third-quarter earnings below Wall Street expectations.
Advancing issues outnumbered decliners by a 2.97-to-1 ratio on the NYSE and 1.37-to-1 ratio on the Nasdaq.
The S&P index recorded 17 new 52-week highs and one new low, while the Nasdaq recorded 37 new highs and 67 new lows.
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