On Monday, the Nasdaq and the S&P 500 edged higher as declining U.S. Treasury yields provided a boost to megacap growth stocks.
Investors also digested data indicating that local manufacturing activity had slowed for the second month in May.
Major stocks such as Apple, Meta, and Alphabet saw gains between 1.1% and 1.7%, driven by a roughly 10 basis point drop in yields on the U.S. 10-year and five-year Treasury notes.
Nvidia, a leader in AI, surged 3.4%, leading a 0.8% rise in the Philadelphia SE Semiconductor Index.
This came after CEO Jensen Huang announced on Sunday that the company’s next-gen AI chip platform would launch in 2026.
GameStop shares soared 26.8% following a Reddit post by influencer Keith Gill, known as “Roaring Kitty,” revealing a $116 million bet on the retailer.
Meanwhile, NYSE Equities reported investigating a technical issue that caused volatility pauses for numerous stocks listed on the exchange.
Out of the 11 S&P 500 sectors, six saw gains, with tech rising 0.9%, while energy dropped 1.7%.
A survey from the Institute for Supply Management showed manufacturing activity decreased to 48.7 in May, below the expected 49.6, signaling a cooling economy.
Yields started falling from one-month highs on Friday as bets increased on the Federal Reserve beginning interest-rate cuts in September following signs of cooling inflation, as measured by the Personal Consumption Expenditures Price Index.
Despite snapping their five-week winning streaks on Friday, the S&P 500 and Nasdaq ended May with strong gains.
The S&P 500 climbed 4.8%, the Dow increased by 2.3%, and the Nasdaq nearly 7%, supported by robust earnings and hopes for easing monetary policy.
“AI drivers, earnings and inflation will continue to drive the market,” said Sam Stovall, chief investment strategist at CFRA Research.
This week, investors are focused on key data, including surveys on the manufacturing and services sectors, factory orders, and the closely watched nonfarm payrolls report on Friday, offering insights into the U.S. economy and the Fed’s potential actions.
“We’re going to be looking at employment data this Friday and we’re getting a whole slew of economic reports, so inflation will still be very much foremost in investors’ minds,” Stovall added.
At 10:14 a.m. ET, the Dow Jones was down 46.63 points, or 0.12%, at 38,639.69, the S&P 500 was up 11.74 points, or 0.22%, at 5,289.25, and the Nasdaq was up 103.70 points, or 0.62%, at 16,838.71.
The Dow underperformed due to declines in financial stocks like Goldman Sachs and JPMorgan Chase & Co. Paramount Global rose 7.1% following a report that Skydance Media might take over the company.
JetBlue Airways shares increased by 4.7% after it forecast a smaller drop in second-quarter revenue due to strong travel demand.
On the NYSE, advancing issues outnumbered decliners by a 1.34-to-1 ratio, and by a 1.38-to-1 ratio on the Nasdaq.
The S&P index recorded 18 new 52-week highs and three new lows, while the Nasdaq recorded 39 new highs and 46 new lows.