(Dec 15): US stocks rallied on Monday as technology stocks staged a comeback from a sluggish week and traders readied themselves for delayed economic data.
The S&P 500 Index climbed 0.1% at 9.57am in New York, with the gauge bouncing back from the previous session’s decline. The tech-heavy Nasdaq 100 Index rose 0.06%.
“We believe that the ‘rotation’ we’ve seen in the stock market recently will likely continue into the end of the year,” said Miller Tabak’s Matt Maley. “However, it might not be as strong as some people are looking for.”
Tech stocks struggled last week as concerns over artificial intelligence bubbled to the surface once more. This was compounded by disappointing earnings from Oracle Corp and Broadcom Inc, which helped offset optimism around the Federal Reserve’s (Fed) interest-rate cut.
However, the sector has started to rebound. Bloomberg’s gauge for the Magnificent Seven advanced 0.4%, ending a two-day slide.
“Tech stocks continue to show a bit of fatigue following a big run,” said John Belton, portfolio manager at Gabelli Funds. “But fundamentals are generally strong so I would expect we can continue to grind higher absent any change in the economic backdrop.”
See also: Pot stocks rise on Trump plan to ease cannabis restrictions — Bloomberg
Traders will turn their attention to a swath of economic data set to be released this week. Nonfarm payrolls for October and November as well as the November unemployment report are due Tuesday. Then on Thursday, October’s partial consumer price index report and November’s full one will be released.
For traders, this week’s economic readings will help fill in the data void that was created by the government shutdown. Economists expect a 50,000 increase in payrolls and 4.5% unemployment rate for November.
Wall Street strategists remain positive US equities. Morgan Stanley’s Michael Wilson said moderate weakness in this week’s job numbers may feed bullishness toward stocks by increasing the probability of further Fed rate cuts.
See also: S&P 500 wavers as investors rotate out of technology behemoths
“We are now firmly back in a good is bad/bad is good regime,” Wilson wrote in a note published on Monday. “This implies that moderate labour market weakness is likely to be viewed in a bullish context by equity markets.”
Meanwhile, Citigroup Inc strategists led by Scott Chronert became the latest to predict double-digit gains for US stocks next year. Chronert sees the S&P 500 jumping to 7,700 points by the end of 2026, with robust earnings and expectations of easing monetary policy at the heart of the forecast.
In terms of single stocks, Immunome Inc soared after the biotech company announced positive topline results from its Phase 3 trial of varegacestat. Silver and gold miners, including Freeport McMoRan Inc, climbed amid a renewed advance in metals prices.
Meanwhile, Costco Wholesale Corp dipped after Roth Capital Partners downgraded the club retailer to sell. Roomba maker iRobot Corp slumped after the company for Chapter 11 bankruptcy and proposed handing over control to its main Chinese supplier.
Uploaded by Chng Shear Lane
