Stocks closed higher Monday as market participants took a glass-half-full stance ahead of this Wednesday's key inflation report.
The Federal Reserve has repeatedly said it will remain data dependent in determining if more rate hikes are needed to bring inflation down to its 2% target. After raising interest rates in July, the central bank is widely expected to keep them unchanged at next week's meeting.
As such, investors are anxiously awaiting Wednesday morning's release of the August Consumer Price Index (CPI) report. Many experts believe headline CPI accelerated in August as gas prices jumped. However, the core CPI reading, which excludes volatile food and energy prices, is expected to decline on an annual basis vs July's figure.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Ahead of this highly anticipated event, futures traders are pricing in a 93% chance for a pause at the next Fed meeting later this month with low probabilities for any additional rate hikes through the rest of this year, according to CME Group.
Morgan Stanley sees significant upside ahead for Tesla
Tesla (TSLA) was one of Monday's biggest gainers, with the mega-cap stock surging 10.1% after Morgan Stanley analyst Adam Jonas upgraded it to Overweight from Equal Weight, the equivalents of Buy and Hold, respectively. The analyst also boosted his price target on TSLA stock to $400 from $250, representing implied upside of nearly 50% to current levels.
Jonas is optimistic that Dojo, Tesla's new artificial intelligence (AI) supercomputer, will help propel growth in the company's software division, opening up new markets that extend beyond electric vehicles. Additionally, the analyst thinks Dojo has the capacity to add $500 billion to the company's enterprise value.
Smucker scoops up Hostess Brands
In other single-stock news, Hostess Brands (TWNK) spiked 19.1% after J.M. Smucker (SJM) said it will buy the Twinkies maker for $5.6 billion in cash and stock. "The acquisition adds a fast-growing, pure-play snacking company to SJM's portfolio, including exposure to indulgent and impulse snacking occasions," says CFRA Research analyst Arun Sundaram.
However, SJM stock slumped 7.0% on the news as the purchase "not only seems expensive and includes stock, but it seems to bear some resemblance to the Big Heart Pet Brands acquisition from 2015, which, safe to say, didn't go fully according to plan," Sundaram adds.
Elsewhere, Qualcomm (QCOM) rose 3.9% after Apple (AAPL, +0.7%) said it will buy the company's 5G modems for smartphones for at least another three years. Apple will remain in the headlines tomorrow, with the tech giant hosting its September event. The company is expected to unveil the latest versions of the iPhone and Apple Watch at the annual event.
As for the major indexes, the Nasdaq Composite rose 1.1% to 13,917, the S&P 500 added 0.7% to 4,487, and the Dow Jones Industrial Average gained 0.3% to 34,663.
Related content
-
Markets Are Quiet Ahead of Fed Day: Stock Market TodayInvestors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early RetirementQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
S&P 500 Hits New High After Oracle Earnings: Stock Market TodayAnother down day for Apple held the Dow Jones Industrial Average back, though.
-
Stocks Grind Up to New All-Time Highs: Stock Market TodayUnitedHealth stock led the Dow Jones Industrial Average amid increasing signs the labor market has not been well for months.
-
Markets Prepare for August Inflation Data: Stock Market TodayApple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
Stocks Slip as Job Growth Stalls: Stock Market TodayThe August jobs report came in much weaker than expected, while the unemployment rate ticked higher.
-
Big Tech Names Rise Above Broad Weakness: Stock Market TodaySome familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
