U.S. Stocks Most Mostly Higher, Nasdaq Jumps Following Tesla Upgrade

Following the notable pullback seen last week, stocks moved mostly higher during trading on Monday. The major averages all moved to the upside on the day, adding to the modest gains posted last Friday.

The major averages all closed in positive territory, with the tech-heavy Nasdaq posting a standout gain. The Nasdaq jumped 156.37 points or 1.1 percent to 13,917.89, the S&P 500 climbed 29.97 points or 0.7 percent to 4,487.46 and the Dow rose 87.13 points or 0.3 percent to 34,663.72.

The tech-heavy Nasdaq received a boost from a surge by shares of Tesla (TSLA), with the electric car maker spiking by 10.1 percent after Morgan Stanley upgraded its rating on the company’s stock to Overweight from Equal-Weight.

Chipmaker Qualcomm (QCOM) also jumped by 3.9 percent after announcing an agreement with Apple (AAPL) to supply Snapdragon 5G Modem-RF Systems for smartphone launches in 2024, 2025 and 2026.

Additionally, shares of Hostess Brands (TWNK) soared by 19.1 percent after the Twinkie maker agreed to be acquired by J.M. Smucker (SJM) in a cash and stock transaction valued at approximately $5.6 billion.

The overall strength on Wall Street partly reflected easing concerns about the outlook for interest rates after a report from the Wall Street Journal suggested a shift in Federal Reserve officials’ stance on rates.

Fed insider Nick Timiraos said the central bank is likely to pause its recent series of rate hikes next week then take a “harder look at whether more are needed.”

While Timiraos said some Fed officials to still prefer to err on the side of raising rates too much, other see risks as more balanced and worry about unnecessarily causing a downturn or triggering financial turmoil.

CME Group’s FedWatch Tool is currently indicating a 93.0 chance the Fed will leave interest rates unchanged next week.

The outlook for November is a little more uncertain, however, with the FedWatch Tool indicating a 54.5 percent chance rates will remain unchanged and a 42.6 percent chance of another quarter point rate hike.

Later this week, the Labor Department’s report on consumer price inflation in August could have a significant impact on the outlook for rates.

Sector News

Airline stocks turned in a strong performance on the day, resulting in a 1.7 percent advance by the NYSE Arca Airline Index. The index continued to regain ground after ending last Thursday’s trading at a four-month closing low.

Significant strength was also visible among gold stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the sector came amid a modest increase by the price of gold.

Retail, tobacco and software stocks also saw notable, while oil and natural gas stocks came under pressure over the course of the session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index advanced by 0.8 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index rose by 0. percent, the German DAX Index and the French CAC 40 Index climbed by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries moved lower after ending the previous session nearly unchanged. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.0 basis points to 4.288 percent.

Looking Ahead

Trading activity may be somewhat subdued on Tuesday as traders await the release of the highly anticipated consumer price inflation report on Wednesday.

Source: Read Full Article