Megacap growth giants like Alphabet and Tesla helped Nasdaq bounce on Monday, while investors awaited the U.S. Federal Reserve's meeting this week.
The market gained amid a media report that Apple (AAPL.O) is in discussions to incorporate Google's Gemini AI engine into the iPhone.
The communication services sector (.SPLRCL), gained about 3%, leading the 11 major S&P 500 sectors after reaching its highest level since Sept. 2021. Tesla (TSLA.O), shares rose 6.3%, topping the S&P 500, after the electric carmaker announced a European Model Y price rise.
Nvidia (NVDA.O) shares rose 0.7% but finished below their session high. The AI poster child held its annual developer conference as investors awaited CEO Jensen Huang's chip plans.
According to Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina, investors were caught between optimism about AI in technology and concerns over the Federal Reserve's policy statement on Wednesday.
"This is a market that really wants to hold onto the momentum trade but what's really weighing on investors' minds is what happens with the Fed this week," he added. "The market is comfortable with a June or July first cut but not sure. Is it pushed out further?" The Dow Jones Industrial Average (.DJI) rose 75.66 points, or 0.20%, to 38,790.43, the S&P 500 (.SPX) jumped 32.33 points, or 0.63%, to 5,149.42, and the Nasdaq Composite (.IXIC) increased 130.27 points, or 0.82%, to 16,103.45.
Nasdaq ended three days of losses. The Philadelphia Semiconductor index (.SOX) ended almost unchanged as the S&P 500 technology index (.SPLRCT) rose 0.5%.
Rate-sensitive real estate (.SPLRCR) and healthcare (.SPXHC) were the weakest of the S&P's 11 major sectors, down 0.02%.
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