The S&P 500 and Nasdaq hit record highs on Monday as technology stocks jumped after the Federal Reserve’s dovish comments eased fears of a sudden tapering in monetary stimulus and boosted optimism around an economic recovery.
Apple Inc jumped 2.3% to an all-time high, while Microsoft Corp, Amazon.com, Google-owner Alphabet Inc rose between 0.9% and 1.3%, helping the tech-heavy Nasdaq outperform the S&P 500 and the Dow.
High-growth tech stocks tend to benefit from expectations of lower rates because their value rests heavily on future earnings.
The benchmark index is tracking its longest monthly winning streak since 2018 on the promise of easy money, with investors shrugging off signs of a slowing economic recovery and surging COVID-19 cases.
Fed Chair Jerome Powell said on Friday the central bank would continue to be cautious in its approach to tapering its massive pandemic-era stimulus, while reaffirming a steady economic recovery.
“The market was wholly prepared for a taper timeline last week and the Fed not really commenting has helped give markets an added push on hopes that easy policies will help offset some risks around rising infection cases,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.
“Although, if the Fed continues to be so dovish in its policy meetings going ahead, markets might think that there are some problems brewing in the economic recovery process.”
The S&P 500 has risen 3.2% so far in August – a seasonally weak period for stocks – and Wells Fargo analysts said last week they expect the index to rise another 8% by the end of the year.
It is also on track to log one of its best year-to-date returns through August of the past six decades, said Chris Larkin, managing director, Trading at E*TRADE Financial.
By 11:55 a.m. ET, the S&P 500 and the Nasdaq Composite added 0.59% and 0.91%, respectively.
The Dow Jones Industrial Average, on the other hand, was up just 0.1% as economically sensitive energy stocks slipped 0.2%.
Falling bond yields also pressured bank stocks, with the S&P 500 banking index down 1.2%.
U.S.-listed shares of Chinese gaming firm NetEase Inc slumped 3.6% as Chinese regulators slashed the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays.
Shares of satellite transporter startup Astra Space Inc plummeted 19.3% after the test launch of its rocket LV0006 ended prematurely about two-and-a-half minutes after liftoff.
All eyes this week will be on the Labor Department’s monthly jobs report, which could set the stage for the Fed’s Sept. 21-22 policy meeting.
Declining issues nearly matched advancers on the NYSE and the Nasdaq.
The S&P index recorded 68 new 52-week highs and no new low, while the Nasdaq recorded 126 new highs and 24 new lows.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
Never miss a story! Stay connected and informed with Mint.
our App Now!!