4:24pm: Market notches win to start the week
The Dow finished Monday up 87 points, 0.3%, at 34,664, the Nasdaq Composite gained 156 points, 1.1%, to 13,918 and the S&P 500 added 30 points, 0.7%, to 4,487. The small-cap Russell 2000 index improved 4 points, 0.2%, to 1,855.
Investors reacted to a report in The Wall Street Journal rover the weekend that said there a consensus existed within the Federal Reserve not to raise rates at next week’s meeting.
“It certainly helps that the market’s thinking that the Fed is probably done and maybe transitioning into a new strategy,” said US Bank’s Rob Haworth, adding, “And that’s giving them some hope that we’re kind of past the toughest spots for corporate earnings
12:00pm: Tech shines but blue-chips fade with CPI ahead
Tech stocks remained buoyant but blue-chips faltered on Monday as investors look ahead to a key week of economic news.
At midday, the Dow Jones Industrial Average was little changed at 34,583.57, the S&P 500 was up 13.61 points, 0.3%, at 4,471.10 while the Nasdaq Composite was up 83.61 points, 0.6%, at 13,845.13.
Tesla continued to benefit from the upgrade by Morgan Stanley (NYSE:MS) while other Wall Street megacaps also drove gains, as investors awaited the closely watched US inflation report later this week for an insight into the future path of interest rates.
The Wall Street Journal reported that the Federal Reserve will keep interest rates unchanged at next week's meeting giving the rate sensitive tech sector a further boost.
Shares in RTX Corp have slumped 7.4% after it said it expects to take a $3 billion hit from issues with roughly 1,200 Pratt & Whitney engines fitted to Airbus jets.
The company said on Monday that it would take the charge in the third quarter. It also expects $1.5 billion less in free cash flow in 2025.
9:40am: Big Tech leads Wall Street higher
Wall Street opened higher, led by tech stocks, as an upgrade by Morgan Stanley (NYSE:MS) sent Tesla shares higher, with sentiment further lifted by reports the Federal Reserve will leave interest rates unchanged at its next meeting.
Shortly, after the opening bell, the Dow Jones Industrial Average was up 181.71 points, 0.5%, at 34,758.30, the S&P 500 was up 27.38 points, 0.6%, at 4,484.87 and the Nasdaq Composite was up 99.04 points, 0.7%, at 13,860.56.
Tesla jumped 5.1% as Morgan Stanley (NYSE:MS) upgraded the EV maker to outperform and set a $400 price target based on hopes for its Dojo supercomputer.
Other big tech names rallied, with Apple up 1.1% ahead of tomorrow’s hotly anticipated unveiling of the iPhone 15, and chipmaker Qualcomm advanced 3.7% after it struck a three-year deal with the iPad maker to supply it with 5G chips for its smartphones.
The rate sensitive tech stocks were given a further boost by a report in The Wall Street Journal that the Federal Reserve has agreed to leave interest rates unchanged at next week’s meeting.
In other news, jelly maker JM Smucker Co fell 8.2% after it said it was buying Twinkie owner Hostess Brands for $5.6 billion, or $34.25 a share. Shares in Hostess Brands jumped 19%.
Elsehwere, Johnson & Johnson (NYSE:JNJ) spin-out Kenvue Inc rose 2.7% boosted by an upgrade by Deutsche Bank.
The German investment bank has moved the consumer health to 'buy' from 'hold' with an unchanged price target of $27.
Analyst Steve Powers sees the company, which owns Band-Aid, Listerine and Neutrogena, as oversold.
7:00am: Strong start expected in New York, Tesla boosted by upgrade
US stocks are expected to start the week on the front foot as reports indicated the Federal Reserve would leave interest rates unchanged at its next meeting while Tesla rose after an upgrade by Morgan Stanley (NYSE:MS).
In pre-market trading, futures for the Dow Jones Industrial Average were 0.2% higher, while those for the S&P 500 rose 0.4%, and contracts for the Nasdaq 100 futures were up 0.6%.
The Wall Street Journal reported on Sunday that there was a consensus among Fed members to not raise rates when the central bank meets next week.
Futures trading now puts the chance of the Fed staying on hold at its September meeting at 93%, according to the CME FedWatch tool.
Whether the Fed hikes again this year is undecided, the WSJ report said.
Shares of Tesla gained 5% in premarket trading after Morgan Stanley (NYSE:MS) upgraded to overweight and set a $400 price target from $250.
The investment bank reckons Dojo, Tesla’s purpose-built supercomputer can add up to $500 billion to Tesla's enterprise value.
Otherwise, investors are eyeing key inflation data in the week ahead after a string of stronger-than-expected economic data points last week renewed worries that the Federal Reserve could raise rates more than previously expected.
Retail sales data is expected Thursday and the University of Michigan’s consumer sentiment survey will be released on Friday,