The Nasdaq Composite (.IXIC) and S&P 500 (.SPX) indexes rose Monday afternoon, led by technology shares, on growing expectations that the Federal Reserve will become less aggressive with its interest rate hikes.
Technology (.SPLRCT) led the gains among S&P 500 sectors as U.S. Treasury yields declined, while the Nasdaq led the rise among the major indexes.
The Dow edged lower.
Consumer discretionary stocks (.SPLRCD) also rose sharply, with Amazon.com Inc (AMZN.O) up after Jefferies said it saw cost pressures easing for the e-commerce giant in the second half of the year.
Investors are geared up for comments Tuesday from Fed Chair Jerome Powell, who analysts expect could say that more time is needed to show inflation is under control.
Money market bets were showing 79% odds of a 25-basis point hike in the Fed’s February policy meeting.
A consumer prices report due Thursday could be key for rate expectations, said Quincy Krosby, chief global strategist, LPL Financial in Charlotte, North Carolina. “The CPI report this week is going to be essential for fine-tuning the Fed funds futures market.”
Also, S&P 500 companies are about to kick off the fourth-quarter earnings period, with results from top U.S. banks expected later this week.
The Dow Jones Industrial Average (.DJI) fell 9.63 points, or 0.03%, to 33,620.98, the S&P 500 (.SPX) gained 17.57 points, or 0.45%, to 3,912.65 and the Nasdaq Composite (.IXIC) added 138.83 points, or 1.31%, to 10,708.12.
Friday’s jobs report, which showed a moderation in wage increases, also lifted hopes that the Fed might become less aggressive in its rate-hike push to reduce inflation.
Tesla Inc (TSLA.O) climbed after the electric-vehicle maker indicated longer waiting times for some versions of the Model Y in China, signaling the recent price cuts could be stoking demand.
Macy’s Inc (M.N) and Lululemon Athletica Inc (LULU.O) fell after both retailers issued disappointing holiday-quarter forecasts.
Advancing issues outnumbered decliners on the NYSE by a 2.60-to-1 ratio; on Nasdaq, a 1.93-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and two new lows; the Nasdaq Composite recorded 114 new highs and 23 new lows.