U.S. stocks advanced on Monday as a rebound in technology shares gained momentum, helping major indices recover further from last week’s steep selloff. In search of hints regarding the Federal Reserve’s interest rate policy, investors are now turning their attention to forthcoming economic statistics.
The rally was led by the technology sector, which rose 1.8%, and was bolstered by upbeat analyst commentary and reports of strong growth at OpenAI’s ChatGPT.
What Drove the Technology Sector’s Rally?
The rebound was powered by two key factors: analyst upgrades and positive AI-sector news. Oracle shares surged 10.8% after D.A. Davidson upgraded the stock to “buy.” Simultaneously, a report from CNBC, citing internal comments from OpenAI CEO Sam Altman, stated the company’s ChatGPT platform was back to exceeding 10% monthly growth. Keith Lerner, CIO at Truist Advisory Services, noted the “sharply oversold market where a little bit of good news can go a long way,” adding that “the rubber band was stretched too far for tech and software” last week.
How Did the Major Indexes Perform?
The rally was broad but tech-heavy. The S&P 500 gained 0.58% to close at 6,972.68, inching toward its January 27 record high of 6,978.60. The Nasdaq Composite jumped 1.03% to 23,267.58. The Dow Jones Industrial Average added a modest 0.05%, reaching 50,140.12 after hitting a new intraday record, having first breached the 50,000-point mark on Friday.
What Economic Data Are Traders Awaiting?
The market’s focus is firmly on two delayed, high-impact reports due this week. The January Consumer Price Index (CPI) will be released on Friday, and the January nonfarm payrolls report will be released on Wednesday. This data will be critical for shaping expectations around the Federal Reserve’s rate path. According to the CME FedWatch Tool, markets are currently pricing in the first rate cut for June.
Which Individual Stocks Saw Significant Moves?
Aside from the broad sector moves, some individual equities made significant moves on specific news:
- Hims & Hers Health sank 17% after Novo Nordisk sued it for patent infringement related to a weight-loss pill copy.
- Workday slid 6% after the HR software provider announced the return of co-founder Aneel Bhusri as CEO.
- Kyndryl plummeted over 54% after the IT services provider delayed its quarterly filing and flagged a material weakness in financial reporting.
- Kroger added about 4% after naming former Walmart executive Greg Foran as its new CEO.
FAQs: Monday’s Market Action
Q: Is the tech selloff over?
A: While the sector rebounded strongly, the S&P 500 Software Services index remains about 13% below its late-January peak, indicating a full recovery has not yet been achieved. The broader tech sector is within 3% of its pre-selloff levels.
Q: What was the market breadth like?
A: Advancing issues outnumbered decliners by a 1.88-to-1 ratio on the NYSE and a 1.46-to-1 ratio on the Nasdaq, indicating a healthy, broad-based advance beyond just mega-cap tech names.
Q: When does Nvidia report earnings?
A: AI chip leader Nvidia, a key bellwether, is scheduled to report results later this month. Its stock rose 2.9% on Monday ahead of the report.
