US stocks reached their highest level since more than a month on Monday. Investors added to the rally fueled by large tech companies.
S&P 500, the blue-chip index, rose 0.9 percent to close at 4,338.93. This is its highest level since April 2022. The Nasdaq composite index, which is heavily tech-oriented, rose by 1.5 percent to its highest level in nearly 14 months.
Stocks are still well below the all-time highs they reached at the beginning of 2022. However, the stock market has started the year strong. The S&P 500 was up 20% from its October lows last week, which is a common definition for a Bull Market.
Recent enthusiasm for artificial intelligent has boosted their performance.
Lou Brien is a market analyst at DRW Trading. He said that only a small number of stocks are driving the S&P. This is an unusual situation that has brought us to this point. This week, investors are focused on the US inflation data as well as important meetings of central banks.
The S&P 500’s energy sector fell by 1 percent, the most on the index, during Monday’s rally. Oil has fallen in price despite the recent Saudi Arabian production cut. Traders are focusing on strong supply elsewhere and demand growth from China. Brent crude prices fell by 3.9 percent to $71.84 per barrel.
Bets that the Federal Reserve will not raise interest rates at its meeting on Tuesday and/or Wednesday boosted the stock market. This marked the first pause of the central bank’s 14-month effort to control inflation.
Susannah Streeter is the head of money markets and currency at Hargreaves Lansdown. The latest US consumer price index report will be published on Tuesday. It is expected to show that Headline inflation According to economists surveyed, Reuters, the rate of growth in May was 4.1 percent.
This would be a marked improvement over the April rate of 4.9 percent, which was followed by a March figure of 5 percent, and give the Fed room to pause.
Streeter stated that “any deviation from the forecast will likely cause a shock of volatility to the markets.”
In Europe, Stoxx 600, which is a region-wide index, closed 0.2% higher. France’s Cac40 gained 0.5 percent and Germany’s Dax gained 0.9 percent.
The European Central Bank is still expected to raise the deposit rate on Thursday by a further quarter percentage point, according to economists.
Matthew Ryan, the head of Ebury’s market strategy, a UK group that deals with foreign exchange payments, said: “We expect another [quarter-point] increase in rates from the ECB this Thursday.”
The Governing council is likely to once again keep its cards close and avoid providing any clear guidance.
In Asia, equities were up, with China’s CSI 300 index rising by 0.2 percent, Hong Kong’s Hang Seng index gaining 0.1 percent, and Japan’s Topix index advancing 0.7 percent.