Stock Market Today: Dow Gains 484 Points in Broad Bounce

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Stocks shot higher out of the gate Monday and rallied into the close as bargain hunters swooped in following last week's big losses. Investors also cheered two of the newest S&P 500 stocks, which helped boost a beaten-down tech sector.

The Nasdaq Composite gained 1.2% today to finish at 16,884. The S&P 500 (+1.2% at 5,471) and Dow Jones Industrial Average (+1.2% at 40,829) notched even bigger advances following their worst weekly performances since March 2023.

Monday's buying was broad-based with all 11 S&P 500 sectors finishing in positive territory. Tech stocks saw some of the biggest gains thanks to well-received news that Palantir Technologies (PLTR) and Dell Technologies (DELL) will be joining the S&P 500.

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Palantir, Dell soar on S&P 500 inclusion

Palantir shares surged 14.1% on the news, and have now more than doubled for the year to date.

"PLTR has proven the naysayers wrong since the beginning of the year," says Nancy Tengler, CEO and CIO of Laffer Tengler Investments. "I was on a call earlier this year where a Wall Street analyst suggested that the company was definitely not an artificial intelligence (AI) company. Tell it to the company's customers – particularly the U.S. government. AIP (Artificial Intelligence Platform) is accelerating."

Laffler adds that "sovereign AI investment is little discussed but will drive growth in the space in the years to come."

Dell, meanwhile, jumped 3.8% today, bringing its year-to-date gain to roughly 38%.

"Strength in Infrastructure Solutions and particularly in servers shows Dell rising to the AI opportunity," says Argus Research analyst Joseph Bonner, who has a Buy on DELL. "We see prospects for strong momentum in AI servers in fiscal 2025 and beyond. We also believe Dell is well positioned in the still-emerging AI PC market."

Erie Indemnity (ERIE, -0.6%) – an insurance firm and financial stock – will also be added to the S&P 500. The three will replace American Airlines Group (AAL, +3.9%), Etsy (ETSY, -1.6%) and Bio-Rad Laboratories (BIO, -2.0%) ahead of the market open on Monday, September 23.

Apple ekes out a win after iPhone 16 reveal

Elsewhere in the tech space, Apple (AAPL) stock edged up 0.04% after the company held its annual September product event. In addition to revealing its highly anticipated iPhone 16 series, the company unveiled a new version of its Apple AirPods and recapped the features available in Apple Intelligence – its generative AI platform.

Wedbush analyst Daniel Ives (Outperform, the equivalent of Buy) thinks many of today's announcements will drive impressive growth for the tech giant down the road. For one, the analyst estimates that initial iPhone 16 shipments will be closer to 90 million vs Street estimates for up to 84 million.

Additionally, he believes "that roughly 20% of consumers worldwide will ultimately access and interact with generative AI apps through the Apple ecosystem over the coming years."

August CPI on deck

Looking ahead, Wall Street is anxiously awaiting Wednesday morning's release of the August Consumer Price Index (CPI) – the last major economic data point ahead of the next Fed meeting.

It's all but certain that the central bank will start cutting interest rates this time around and Wednesday's data could tip the scale on just how big that rate cut will be.

According to CME Group's FedWatch Tool, futures traders are currently pricing in a 71% chance the Fed will lower the federal funds rate by a quarter-percentage point. Odds that it will be by a half-percentage point are at 29%.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.