Stocks ended higher Monday, with tech stocks leading the way, as investors braced for a key series of central-bank interest-rate decisions this week, including the Federal Reserve.
The tech-heavy Nasdaq gained 0.8% to close at 16,103.45, while the S&P 500 gained 0.63% to 5,149.42, and the Dow Jones Industrial Average rose 0.20% to 38,790.43.
Nvidia ended up 0.7% as the company kicked off its three day GTC Developer Conference in California.
The two-day policy Federal Open Market Committee meeting begins Tuesday and ends with an announcement Wednesday.
Sam Millete, director of fixed income at Commonwealth Financial Network, said that "the Fed is going to be taking a lot of the oxygen out of the room this week as they conclude their March meeting on Wednesday afternoon."
"It's going to be a really interesting meeting because markets don't expect any interest rate changes at this meeting and in fact don't have any changes priced into the next meeting either," he said.
Millete added that "we’ve seen some mixed economic data to start the year."
"It's going to be interesting to see how the Fed reacts to that, especially in Fed Chair Jerome Powell's post meeting press conference," he said.
Updated at 1:02 PM EDT
Fading June bets
The CME Group's FedWatch is pricing in no chance for any kind of move by the Fed over the next two meetings, and has pared its bets on a June rate cut down to around 46.3% following last week's faster-than-expected inflation readings and another round of soft weekly jobless claims.
Benchmark 10-year notes are trading at a four-week high of 4.316%, while 2-year notes, which have added 12 basis points over the past month, are firmly north of 4.7%.
🇺🇸FOMC: no basis for a dovish tone.
— Althea Spinozzi (@Altheaspinozzi) March 18, 2024
- SEP is likely to revise inflation and growth up for '24
- Dot plot may show less than 3 cuts for the year
➡️yields are likely to soar across maturities, 10y yields to rise toward 4.5%.
Click👇 https://t.co/elcrO9IrGb
Updated at 10:44 AM EDT
Big gains
Stocks are adding to their early upside moves in the opening hour of trading, with the S&P 500 last marked 55.8 points higher, or 1.09%, and the Dow adding around 55 points.
Tech is the outsized gainer, with the Nasdaq rising 264 points, or 1.65%, to boost its year-to-date gain past 10%.
S&P 500 Opening Bell Heatmap (Mar. 18, 2024)$SPY +0.84% 🟩$QQQ +1.11% 🟩$DJI +0.31% 🟩$IWM +0.21% 🟩
— Wall St Engine (@wallstengine) March 18, 2024
Stocks on move: $GOOGL +5.86%, $SMCI +5.3%, $AAPL +1.7%, $TSLA +3.3%, $QCOM +1.9%, $NVDA +3.7%, $PEP +2.1%, $MU +2.6%, $PDD +3.9%, (🟢) || $FOUR -7.2%, $LI -6.5%, $MSTR… pic.twitter.com/Aeb8chmBYl
Updated at 9:45 AM EDT
Google surge
Alphabet shares are surging in early trading, and were last marked 6.9% higher at $150.87 each, following a Bloomberg report that suggests Apple is working with the Google parent to infuse its iPhone software lineup with Gemini-powered AI.
Google's gains, the best since early December, reflect investor hopes that Apple's 2 billion installed base will add further heft to Alphabet's search revenues and extend its market leadership over Microsoft (MSFT) .
As for the economics of $AAPL licensing Gemini from $GOOG, my sense is it would be in the billions of dollars per year. @dougclinton and I compared notes:
— Gene Munster (@munster_gene) March 18, 2024
1. It would probably be usage based vs a flat guarantee like the search deal (Google pays Apple around $15B a year for…
Updated at 9:12 AM EDT
AI Woodstock
Nvidia CEO Jensen Huang will deliver the keynote address to kick-off the AI chipmaker's four-day GTC conference later today in San Jose.
Investors are looking to the launch of a new AI chip, the Blackwell B100, as well as the potential for a bundled AI platform that could further enhance Nvidia's pricing power.
Nvidia shares were last marked 2.75% higher at $902.50 each in pre-market trading.
Related: Analysts unveil new Nvidia price targets ahead of 'AI Woodstock' conference
Check back for updates throughout the trading day
The Fed's two-day policy meeting, which ends Wednesday in Washington, will highlight a week where no fewer than six major global central banks will unveil new rate decisions as the global economy finds renewed strength and inflation pressures resurface.
Global oil prices in fact hit a fresh four-month high Monday after data from China showed both industrial production and retail sales topped forecasts for the first two months of the year. Those reports followed stronger-than-expected export and inflation figures last week.
Brent crude contracts for May delivery, the global benchmark, were marked 63 cents higher at $85.96 per barrel while copper prices in Shanghai rose to just over $10,000 per ton.
Investors are expecting the Fed to hold its benchmark lending rate steady at between 5.25% and 5.5%, but fresh economic and inflation projections could trim its full-year rate-cut forecasts and test the market's assumption that the first of those reductions will arrive in June.
Benchmark 10-year-note yields were moving higher into the New York trading session and were last marked at a four week high of 4.311%, while 2-year notes were pegged at 4.715%.
The U.S. dollar index, meanwhile, was marked 0.02% lower at 103.412 against a basket of six major global currency peers.
On Wall Street, tech stocks look set to power market gains again Monday as AI-chip maker Nvidia (NVDA) kicks off its three day GTC Developer Conference in California and reports suggest Apple (AAPL) will use Alphabet's (GOOG) Gemini AI technology to power its iPhone features.
Futures tied to the Nasdaq suggest a 221 point opening bell gain for the tech benchmark, which has risen 6.41% so far this year. Alphabet is called 4.8% higher and Nvidia is looking at a 2.8% gain.
A light calendar of earnings this week will likely keep the S&P 500 focused on Wednesday's Fed decision. But a busy slate of updates on Thursday will effectively close out the fourth-quarter reporting season with numbers from FedEx (FDX) , Nike (NKE) and Lululemon (LULU) .
Overall, collective S&P 500 earnings are forecast to rise 10% from a year ago to $476 billion, with the pace of growth slowing to around 5% over the first three months of this year.
Futures contracts tied to the S&P 500 suggest a 42 point opening bell gain, while those linked to the Dow Jones Industrial Average are priced for an 80 point advance.
In overseas markets, Japan's Nikkei 225 returned to its winning ways Monday with a 2.67% gain ahead of tomorrow's Bank of Japan policy meeting, which could include the country's first rate hike in more than 17 years.
The regionwide MSCI ex-Japan benchmark, meanwhile, rose 0.67% into the close of trading following the better-than-expected set of economic data from China.
In Europe, data from Eurostat confirmed the pace of February inflation at 0.6% on the month, and 2.6% on the year. The pound held at 1.2726 against the U.S dollar ahead of a Bank of England rate decision later in the week.
The regionwide Stoxx 600 index was marked 0.02% higher in early Frankfurt trading, while Britain's FTSE 100 added 0.14% in London.
Related: Veteran fund manager picks favorite stocks for 2024
