U.S. stock indexes opened higher on Monday, boosted by technology stocks with Tesla Inc. rallying as Morgan Stanley upgraded the shares, while investors awaited inflation data due later this week for clues on the Federal Reserve’s interest-rate policy.
How are stock indexes trading
-
The S&P 500
SPX
rose 19 points, or 0.4% to 4,477 -
The Dow Jones Industrial Average
DJIA
gained 122 points, or 0.4% to 34,704 -
The Nasdaq Composite
COMP
climbed 88 points, or 0.7% to 13,850
The Dow, S&P 500 and Nasdaq all lost ground last week.
What’s driving markets
U.S. stock indexes were rising on Monday morning with technology stocks leading the broader market higher as traders braced for a busy week of economic data releases.
Tesla shares
TSLA,
jumped 6.2% after Morgan Stanley analyst Adam Jonas upgraded the electric-vehicle company’s stock to overweight from equal weight in his latest note, basing most of that newfound optimism on Tesla’s new machine-learning supercomputer, Dojo.
Tom Lee, head of research at Fundstrat, noted that the market was also welcoming a report in The Wall Street Journal suggesting the Fed now thinks “the burden has shifted toward evidence of an accelerating economy to justify higher rates.”
The August U.S. consumer-price index will be published Wednesday, and the August retail sales report is due Thursday, with both likely to impact the Federal Reserve’s thinking as it considers whether to change interest rates at its policy meeting next week.
Don’t miss: When will consumers stop buying more stuff? It’s a key question for the stock market in the week ahead.
“[I]f the incoming data continues to be softer (on inflation), the Fed likely shifts away from ‘data dependency’ towards looking at more forward measures. The media article referenced reflects this, with the nuance that accelerating economic growth could pose a risk to this view,” said Lee in a note.
“But we still see equity markets higher by year-end and once we are through this continued chop, we see S&P 500 rising to 4,750 or greater by year-end,” he added.
See: Why financial markets may be unprepared for a fourth-quarter ‘inflation surprise’
“One primary catalyst behind this recent volatility has been the relentless surge in oil prices, which has exacerbated concerns about inflation precisely when many major central banks had hoped to conclude or be in the final stages of their interest rate hikes,” said Stephen Innes, managing partner at SPI asset management.
“Bond yields, which had briefly eased in late August, resumed their upward climb, with 10-year Treasuries hovering around the 4.3% mark midweek before settling somewhat,” Innes added.
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