The S&P 500 rose on Monday, boosted by technology stocks, while the Dow Jones Industrial Average hit new highs as investors awaited key economic data and another round of earnings reports after a volatile week that ended with the 30-stock index hitting a key milestone.
The broad index rose 0.6%, while the Dow Jones last traded around a static line after earlier hitting a new record intraday high. The Nasdaq Composite jumped 1%.
Nvidia and Broadcom were the standouts again on Monday, extending their gains from the previous session with advances of 2% and 3% respectively. Shares in AI peer Oracle rose 9% after DA Davidson received an upgrade to buy from neutral on optimism surrounding OpenAI and its users, SEEbiz reports.
The developments come after the major averages rallied on Friday, with the Dow Jones surpassing 50,000 for the first time ever, following significant losses earlier in the week. The decline was driven by a selloff in technology stocks, led by software stocks. Bitcoin also fell before recovering, as investors took a risk-averse stance.
“Investors are saying, ‘Okay, we’ve had a huge recovery. Is it sustainable? Is this something that I can get into and end up getting beat, or is this really another buying opportunity?’” said Sam Stovall of CFRA Research.
“We’ve gone from a 17% premium to an 8% discount,” the chief investment strategist said of the tech stock’s price-to-earnings ratio compared to the five-year average. “You could say, ‘Well, that’s pretty good, so maybe it’s time we didn’t save ourselves from technology just yet.’”
Certainly, the market’s recent rotation out of technology could repeat itself this week, if earnings announcements for the week are favorable. Coca-Cola and Ford Motor are due to report results on Tuesday, for example.
