The tech-heavy Nasdaq led gains among the main Wall Street indexes on Monday, boosted by shares of Amazon and Tesla, while signs of a cooling labor market supported bets of a slower pace of interest rate hikes by the Federal Reserve.
Amazon.com Inc AMZN.O rose 3.4% after Jefferies said it saw cost pressures easing for the e-commerce giant in the second half of the year.
Tesla Inc TSLA.O climbed 7.5% after the electric-vehicle maker indicated longer waiting times for some versions of the Model Y in China, signaling the recent price cuts could be stoking demand.
Other rate-sensitive growth stocks like Apple Inc AAPL.O and Alphabet Inc GOOGL.O gained about 1% each as U.S. Treasury yields declined.
The gains pushed technology .SPLRCT to the top of the major S&P 500 sector indexes list. The S&P 500 growth index .IGX was up 3.6%, outperforming a 0.7% rise in its value peers .IVX.
The benchmark S&P 500 .SPX and the Nasdaq .IXIC closed the week higher on Friday after a moderation in wage increases and a decline in U.S. services activity in December buoyed hopes of a less hawkish stance from the Fed as well as a soft landing for the U.S. economy.
“The number of jobs created is working its way down slowly and wages are starting to calm down. Both of those are important for inflation coming under control, without necessarily careening the U.S economy to a recession,” said Art Hogan, chief market strategist at B. Riley Financial.
The highly awaited U.S. Labor Department’s inflation report on Thursday is expected to show some moderation in year-on-year consumer prices in December.
Money market bets show 75% odds of a 25-basis point hike in the Fed’s February policy meeting, with the terminal rate expected just below 5% by June. FEDWATCH.
Other economic data such as weekly jobless claims and the University of Michigan’s consumer sentiment report will also be in focus this week, as big U.S. banks kick off the quarterly earnings season on Friday.
The gains pushed technology .SPLRCT to the top of the major S&P 500 sector indexes list. The S&P 500 growth index .IGX was up 3.6%, outperforming a 0.7% rise in its value peers .IVX.
The benchmark S&P 500 .SPX and the Nasdaq .IXIC closed the week higher on Friday after a moderation in wage increases and a decline in U.S. services activity in December buoyed hopes of a less hawkish stance from the Fed as well as a soft landing for the U.S. economy.
“The number of jobs created is working its way down slowly and wages are starting to calm down. Both of those are important for inflation coming under control, without necessarily careening the U.S economy to a recession,” said Art Hogan, chief market strategist at B. Riley Financial.
The highly awaited U.S. Labor Department’s inflation report on Thursday is expected to show some moderation in year-on-year consumer prices in December.
Money market bets show 75% odds of a 25-basis point hike in the Fed’s February policy meeting, with the terminal rate expected just below 5% by June. FEDWATCH.
Other economic data such as weekly jobless claims and the University of Michigan’s consumer sentiment report will also be in focus this week, as big U.S. banks kick off the quarterly earnings season on Friday.
The S&P index recorded 10 new 52-week highs and two new lows, while the Nasdaq recorded 95 new highs and 14 new lows.
But Huntington’s Augustine said the central bank needs to see further slowing of price increases in the December inflation report, due out on Thursday, before deciding whether to slow its next rate hike. It raised rates 50 basis points in December.
Also next week several of the biggest U.S. banks including JPMorgan and Bank of America will kick off the fourth-quarter earnings season on Friday.