Hopes for a pause in interest rates helped to send stocks higher Monday. The technology sector, which is more sensitive to rate fluctuations, especially benefitted. (Higher rates today lower the value of tech’s growth tomorrow.)
Traders are betting on a 72% chance the Federal Reserve will keep rates unchanged at this week’s meeting, according to the CME Group’s FedWatch tool. That’s because economists think the consumer price index, coming out later today, will show May’s inflation slowing to just 0.1% from the previous month, or 4% year over year. That’s a “headline number [that] is going to feel good,” said Mark Zandi, chief economist at Moody’s Analytics.
Big Tech stocks mostly rose at least 1%; Apple even hit an all-time high of $183.79 per share. Meanwhile, Oracle’s better-than-expected earnings report pushed its shares 3% higher in extended trading.
The Nasdaq popped 1.53% to reach its highest level since April. The S&P 500 added 0.93%, further adding to the gains it’s accumulated over the past few days, and the Dow Jones Industrial Average climbed 0.56%.
Despite those big moves, it was a relatively light trading day. On an average day, 80.6 million shares of the SPDR S&P 500 ETF Trust, a tracker of the broad S&P 500 index, are traded. Yesterday, only 31.5 million exchanged hands. That’s probably wise, considering inflation data coming out tomorrow and the Fed meeting happening right after that. Tech greatly benefits from lower interest rates, but remember that the converse applies too.
