U.S. stocks advanced to their highest level in more than a year on Monday, as investors joined a rally fueled by shares of major technology companies.
The blue-chip S&P 500 rose 0.9 percent to close at 4,338.93, surpassing a high reached last August and reaching its highest level since April 2022. The tech-heavy Nasdaq Composite rose 1.5 percent to a level that it was also the highest in the year for almost 14 months.
The stock remains well below the all-time highs reached at the start of 2022, but has had a strong start to the year. Last week, the S&P rallied 20 percent from its October lows, meeting the common definition and bull market.
Gains were strong in the semiconductor and software industries, which advanced 33 percent and 19 percent respectively over the past 12 months, with recent enthusiasm for artificial intelligence boosting their performance.
“The S&P has driven very few stocks,” said Lou Brien, market strategist at DRW Trading. “This is an unusual circumstance that brings us here.
Investors are gearing up for US inflation data and important central bank policy meetings this week.
Monday’s stock rally was missed by oil stocks as the S&P 500 energy sector fell 1 percent, making it the index’s biggest decliner. Oil prices fell despite recent output cuts announced by Saudi Arabia, with traders focusing on strong supplies elsewhere and rising demand in China. Brent crude settled down 3.9 percent at $71.84 a barrel.
Stocks were boosted by bets that the Federal Reserve will resist raising interest rates at its meetings on Tuesday and Wednesday, marking the first pause in the central bank’s 14-month taming campaign. inflation.
“With indications that the economy is moving into a potential recession, the expectation is that [Fed policymakers] it is likely to keep rates flat,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The latest US Consumer Price Index report will be released on Tuesday. It is expected to show overall inflation it slowed to 4.1 percent year-on-year in May, economists in a Reuters poll said.
The reading would mark a significant improvement from April’s rate of 4.9 percent after 5 percent in March and give the Fed more room to pause.
“Any deviation from the forecast is likely to cause a jolt of volatility in the markets,” Streeter said.
In Europe, the region-wide Stoxx 600 closed 0.2 percent higher, while France’s Cac 40 added 0.5 percent and Germany’s Dax advanced 0.9 percent.
Economists are still confident that the European Central Bank will raise its deposit rate by another quarter of a percentage point at Thursday’s policy meeting.
“We see more [quarter-point] a rate hike from the ECB on Thursday is almost certain,” said Matthew Ryan, head of market strategy at Ebury, the UK foreign exchange payments group.
“Although it is likely that the Governing Council will again keep its cards close to its chest and avoid giving any clear guidance.”
In Asia, stocks rose, with China’s CSI 300 up 0.2 percent, while Hong Kong’s Hang Seng added 0.1 percent and Japan’s Topix added 0.7 percent.