4:07pm: Trading volume lower Monday
The Dow closed Monday up 190 points, 0.6%, at 34,067, the Nasdaq Composite jumped 203 points, 1.5%, to 13,462 and the S&P 500 added 40 points, 0.9%, to 4,339. The small-cap Russell 2000 index climbed 10 points, 0.5%, to 1,876.
Monday marked the S&P 500's best finish since April 2022. Last week, the index rose 20% from its October low, signaling to some that a bear market is over.
Despite the gains, it was a relatively low-volume trading day. Instead, investors have largely chosen to wait for the Federal Reserve's meeting this week. The prevailing market sentiment is that the FOMC will pause interest rate hikes when its meetings conclude on Wednesday.
12:05pm: Stocks up ahead of Fed rate decision
US stocks were higher in noon trading ahead of key readings on inflation and consumer spending as well as Wednesday's Federal Reserve interest rate decision.
At midday, the Dow rose 49 points to 33,925, while the S&P 500 added 15 points at 4,313 and the tech-heavy Nasdaq gained 100 points to 13,359.
“We don’t necessarily believe that there’s no more hikes in the cards, but we do think it’s a 50/50 chance of another hike happening in this cycle,” Kremer said,” Certuity co-chief investment officer Dylan Kremer said.
Notable movers included shares of Nasdaq, which sank 13% after the exchange operator said it is spending $10.5 billion in cash and stock to acquire Adenza, a company that develops risk-management and related regulatory software for the financial services market, from Thoma Bravo.
9:35am: Cautious optimism
US stocks kicked off the new trading week higher ahead of the Federal Reserve’s upcoming interest rate decision due Wednesday.
Just after the market opened, the Nasdaq had added 57 points or 0.4% at 13,315 points, the S&P 500 was up 12 points or 0.3% at 4,310 points, and the Dow Jones was up 90 points or 0.3% at 33,966 points.
FOREX.com market analyst Fiona Cincotta noted that the S&P 500 was hovering around a 10-month high, extending last week’s upbeat tone.
“The market is pricing in a 75% probability that the Fed will skip a June interest rate hike after a series of weaker-than-expected US economic data: US ISM services PMI, factory data, and jobless claims came in below forecasts,” she said.
“The pause would give the Fed more time to assess the impact of the 500 basis point rate hikes this cycle on the economy, ahead of another possible rate hike in July.”
7:45am: CPI eyed ahead of Fed decision
The main US stock indexes are expected to start higher on Monday, extending last week's gains as investors look ahead to the latest inflation data and the key Federal Reserve policy decision due this week.
In pre-market trading, Dow Jones Industrial Average (DJIA) futures were up 0.1%, while those for the S&P 500 added 0.3%, and contracts for the Nasdaq 100 futures rose 0.5%.
Investors are coming off a positive week for markets, with the S&P 500 posting its fourth straight week of gains, and brushing its highest point since August. On Friday, the broader market index added 0.1%, while the DJIA also rose 0.1%, and the Nasdaq Composite gained 0.2%.
With little on the corporate or economic agenda on Monday, investors will be eyeing Tuesday’s consumer price index (CPI) report for signs of easing inflation which could encourage the Fed to pause its recent string of interest rate hikes.
The latest two-day Federal Open Market Committee (FOMC) meeting will then conclude on Wednesday. According to the CME FedWatch Tool, the likelihood that the Fed will pause rate hikes at its June meeting currently stands at about 70%.
TickMill Group’s market analyst Patrick Munnelly commented: "Recent US data has presented a mixed picture, with monthly payroll data indicating a tight employment market, but other indicators suggesting a softening economy as previous interest rate hikes take effect. As a result, it is anticipated that the Fed will likely take a pause and maintain rates at the range of 5.00-5.25%."