The three major U.S. stock indexes closed higher on Monday with the S&P 500 and the Nasdaq notching intraday record high closes, as investors await the Federal Reserve’s crucial policy meeting later this week.
Tesla shares climbed 3.6 percent after regulatory filings revealed CEO Elon Musk had acquired nearly $1 billion worth of the electric vehicle maker’s stock on Friday. And Google parent Alphabet hit a record high and raced past $3 trillion in market capitalization.
The Federal Open Market Committee meeting on September 16 and 17 looms large over sentiment this week with market participants widely expecting a 25-basis-point reduction following recent economic data signaling labor market weakness.
“The market is counting on sort of a goldilocks scenario where the employment market is just weak enough to prompt the Federal Reserve to start a rate cutting series, not just one, without disrupting overall growth,” said Carol Schleif, Chief Investment Officer at BMO Family Office. “I think the markets will be disappointed if the Fed doesn’t give some hint that they intend to continue rate cuts.”
Traders on Monday are pricing in a 96 percent chance of a 25-basis-point cut at this week’s meeting.
Tesla’s gains boosted the S&P 500 consumer discretionary sector 1.1 percent to its highest level in nearly nine months. Meanwhile, Alphabet helped lift the communication services sector up 2.33 percent.
Nvidia slipped 0.04 percent after China’s market regulator said it will continue an investigation into the AI chip leader after preliminary findings showed it had violated the country’s anti-monopoly law.
The Dow Jones Industrial Average rose 49.23 points, or 0.11 percent, to 45,883.45, the S&P 500 gained 30.99 points, or 0.47 percent, to 6,615.28 and the Nasdaq Composite gained 207.65 points, or 0.94 percent, to 22,348.75.
