NEW YORK (AP) — U.S. stocks are rallying toward more records Monday as gains for technology companies keep pushing the market higher.
The S&P 500 was up 0.9% in late trading and on track to close above its all-time high set on Thursday. The Dow Jones Industrial Average was up 175 points, or 0.5%, with an hour remaining in trading. The Nasdaq composite was adding 1.2% to its own record.
Autodesk jumped 7% for one of the market’s biggest gains after after an investment firm said it will try to delay the software company’s annual meeting so that it can nominate new directors for the board. Starboard Value also outlined how it says Autodesk hasn’t performed as well financially as it should have. In response, Autodesk said it will review Starboard’s suggestions but added that it has “a clear strategy that is working.”
The only stock to rise more in the S&P 500 was Super Micro Computer, which leaped 8.2% to bring its gain for the year so far to a staggering 221.5%. The company, which sells server and storage systems used in artificial intelligence and other computing, is part of the supernova around AI that’s been overshadowing almost everything else on Wall Street.
Chip company Broadcom rose 5.9% to add to gains from last week after it reported better profit than expected and said it would undergo a 10-for-one stock split to make its price more affordable. It followed Nvidia, the company that’s become the poster child of the AI frenzy and just executed a similar split.
Broadcom was one of the strongest forces pushing the S&P 500 upward, along with a 2.8% rise for Apple and 1.5% climb for Microsoft.
Such continued momentum for Big Tech stocks, along with easing pressure on inflation, has investors “cheering the ‘glass half full’ outlook” instead of focusing on the struggles of lower- and middle-income Americans, among other challenges, according to Anthony Saglimbene, chief market strategist at Ameriprise.
Big Tech was helping to offset pressure on the stock market caused by rising Treasury yields in the bond market. The climb in yields erased some of the slack created last week when better-than-expected reports on inflation raised hopes that the Federal Reserve will cut interest rates later this year.
This upcoming week has few top-tier economic reports for the United States, outside of Tuesday’s update on how much customers are spending at U.S. retailers and Friday’s preliminary look at the state of U.S. business activity. Markets will also be closed Wednesday for the Juneteenth holiday.
A report on Monday said manufacturing in New York state is still contracting, though not by as much as economists expected. Manufacturing has been one of the areas hardest hit by the Federal Reserve’s zeal to keep its main interest rate at the highest level in more than two decades.
The Fed is trying to hold rates high for long enough to slow the economy and snuff out high inflation, but it wants to cut rates and reverse the momentum before the slowdown can evolve into a painful recession.
High interest rates hurt all kinds of investments, and they tend to hit some areas particularly hard. Utilities in the S&P 500 fell 0.8% for the largest loss among the 11 sectors that make up the index. They often get hurt when bonds are paying more in interest and drawing away the investors seeking income who would otherwise gravitate to utilities.
GameStop was another laggard and fell 10.8% following its annual shareholder meeting. The stock has been soaring and sinking, as it rides waves of enthusiasm by smaller-pocketed investors. At the meeting, CEO Ryan Cohen said the struggling video game retailer will focus on cutting costs that would involve a “smaller network of stores.”
In the bond market, the yield on the 10-year Treasury climbed to 4.27% from 4.22% late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose by less. It climbed to 4.76% from 4.71%.
In stock markets abroad, European indexes calmed somewhat following last week’s rout. France’s CAC 40 rose 0.9% after tumbling last week to its worst week in two years on worries that potential losses by the president’s centrist party could lead to sharply higher debt for the country.
The modest gains for Europe followed losses in Asia. Japan’s Nikkei 225 dropped 1.8%.
AP Business Writer Elaine Kurtenbach contributed.
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