Stock Market Today: Nasdaq Leads Rally as Tesla Stock Soars

(Image credit: Karol Serewis/SOPA Images/LightRocket via Getty Images)

published 11 September 2023

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.

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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.

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 Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.