Wall Street rises to its highest level since the start of August
Wall Street rose again Monday to begin a holiday-shortened week and reached its highest level in more than three months.
The Standard & Poor’s 500 index gained 33.36 points, or 0.7%, to 4,547.38, coming off its third straight winning week. The Dow Jones industrial average added 203.76 points, or 0.6%, to 33,151.04, and the Nasdaq composite climbed 159.05 points, or 1.1%, to 14,284.53.
Microsoft was the strongest force pushing the market higher, and it rose 2.1% after saying it’s bringing on Sam Altman for a new venture following his sudden dismissal as chief executive of OpenAI, the maker of ChatGPT. Microsoft said it would also continue its partnership with OpenAI as fervor around artificial intelligence technology and the huge profits it’s expected to create continue to dominate Wall Street.
Stocks broadly drifted higher through the day before they took a turn upward in the afternoon when yields fell in the bond market following a Treasury auction. Easing Treasury yields have been the main reason for a strong rally for stocks in recent weeks.
This week is relatively light on reports that could sway the hopes on Wall Street that have underpinned that drop in Treasury yields.
Microsoft has hired Sam Altman and another architect of OpenAI after they unexpectedly departed the ChatGPT maker days earlier in a corporate shake-up.
Wall Street is getting more convinced that inflation is cooling enough for the Federal Reserve to finally be done with its market-crunching hikes to interest rates. Not only that, traders are moving up their expectations for when the Fed could actually begin cutting interest rates.
Despite Fed officials saying they may keep rates high for a while to ensure high inflation is definitively beaten, traders are thinking the first cut to rates could happen by early summer or maybe even by March. Cuts to rates tend to act like steroids for financial markets and offer oxygen across the financial system.
The Thanksgiving holiday means the U.S. government will release its weekly update on jobless claims on Wednesday instead of the usual Thursday. Other than that, the release of the minutes from the Fed’s latest policy meeting on Tuesday and preliminary reports on U.S. business activity on Friday are among the highlights.
That could make Nvidia’s upcoming profit report Tuesday the week’s highest-profile event.
Nvidia carries huge sway on the S&P 500 and other indexes because it’s swelled to become the fifth-most-valuable U.S. stock. Much of the rise has been because of excitement around AI, and Nvidia’s report could offer clues on how much all the talk about AI is translating into actual sales.
Analysts expect Nvidia to say its earnings per share more than quintupled from a year earlier and its revenue soared to nearly $16.2 billion from less than $6 billion.
Cruise CEO and co-founder Kyle Vogt announced his resignation Sunday night but didn’t give a reason for his departure.
Nvidia has been one of the seven Big Tech stocks that have accounted for a disproportionate amount of the S&P 500’s gains this year. The Magnificent Seven stocks have returned 73% so far this year, versus just 6% for the other 493 companies, according to Goldman Sachs strategists.
Although forecasts continue for them to deliver stronger growth, the strategists led by David Kostin warn that “the risk/reward profile is not especially compelling given elevated expectations.”
Nvidia rose 2.3% before its report. Best Buy, Deere, HP and Lowe’s will also be giving their latest quarterly updates this week.
On the losing end of Wall Street on Monday was Kohl’s. The retailer fell 2.7% after it said that Dave Alves left as its president and chief operating officer, less than nine months after naming him to the post.
In the bond market, Treasury yields were holding relatively steady. The yield on the 10-year Treasury, which is the centerpiece of the bond market, slipped to 4.42% from 4.44% late Friday.
The two-year yield, which moves more on expectations for Fed action, dropped to 4.89% from 4.90% late Friday.
In stock markets abroad, Japan’s Nikkei 225 index touched a 33-year high before falling later by 0.6%.
Stock indexes were stronger elsewhere in Asia and mixed in Europe.
Crude oil prices rose to recover some of their sharp losses over the last couple of months. A barrel of U.S. crude oil rose 2.2% to $77.69, but it’s still well below its perch above $93 in late September.
Brent crude, the international standard, rose $1.71 to $82.32 per barrel.
AP writer Zimo Zhong contributed to this report.
