Wall Street’s main stock indexes advanced in choppy trading on Monday after Treasury yields retreated from session highs, while investors awaited data and commentary from the Federal Reserve’s policy-makers to gauge its rate outlook.
US stocks recorded weekly losses on Friday as traders scaled back expectations on the timing of rate cuts.
They now see an around 51% chance of the Fed announcing its first rate cut in June, according to the CME Fed Watch Tool, down from about 58% at the beginning of last week.
Hawkish commentary from central bank officials last week and stronger-than-expected manufacturing and jobs reports pointed to a resilient US economy, easing the pressure on the Fed to cut interest rates quickly.
The market also pared back expectations of more than three rate cuts this year, from between three and four a few weeks ago, according to LSEG data.
“The data firmly supports that with stable inflation and the above trend growth that we’ve seen, there’s becoming less and less of a need for any sort of immediate cuts,” said Mike Dickson, head of research at Horizon Investments.
The yield on 10-year Treasury notes rose to its highest level since last November earlier in the session.
It later pared some gains and was last at 4.4339%.
Market focus now shifts to the March reading of the US Consumer Price Index, due later in the week, that is expected to show a rise in headline inflation to 3.4% year-on-year, from 3.2% in February.
Also on the radar is the release of minutes from the Fed’s latest meeting, where it stuck to its guidance of three rate cuts in 2024.
Investors await commentary from Chicago Fed President Austan Goolsbee and his Minneapolis counterpart Neel Kashkari later in the day for policy cues.
First-quarter earnings season picks up pace now, with banking giants JPMorgan Chase, Citigroup and Wells Fargo scheduled to report later in the week.
“In an environment where you’ve got higher rates, it makes earnings growth even more important, and expectations for earnings growth are fairly elevated,” Dickson said.
Meanwhile, Wells Fargo raised its year-end target for the benchmark S&P 500 index to 5,535 – the highest among Wall Street brokerages – from its previous forecast of 4,625.
Leading gains across mega cap growth stocks, Tesla rose 5.2% after CEO Elon Musk said the company would unveil the Robotaxi on August 8.
At 11:30 a.m. ET, the Dow Jones Industrial Average was up 39.32 points, or 0.10%, at 38,943.36, the S&P 500 was up 6.92 points, or 0.13%, at 5,211.26, and the Nasdaq Composite was up 39.14 points, or 0.24%, at 16,287.66.
Eight of the 11 S&P 500 sectors advanced, with consumer discretionary leading gains, while health care lagged.
Cryptocurrency-related stocks gained, tracking rising Bitcoin prices.
Exchange operator Coin base Global and software firm MicroStrategy added 6.2% and 5.5%,respectively.
Advancing issues outnumbered decliners by a 2.11-to-1 ratio on the NYSE and by a 1.63-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and two new lows, while the Nasdaq recorded 58 new highs and 59 new lows.
