Stocks closed higher Monday, with the upside fueled by massive gains from several Magnificent 7 stocks. Wall Street is also looking forward to this week's Federal Reserve meeting, hopeful for clues on the central bank's rate-cut plans.
At the close, the Dow Jones Industrial Average was up 0.2% at 38,790, the S&P 500 was 0.6% higher at 5,149, and the Nasdaq Composite had gained 0.8% to 16,103.
A 4.6% rally in Alphabet's (GOOGL) share price helped spark the outsized returns for the S&P 500 and Nasdaq. The communication services stock jumped after a Bloomberg report indicated Apple (AAPL) is considering licensing Google's Gemini generative artificial intelligence (AI) models for the iPhone. Apple stock rose 0.6% on the news.
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.
CFRA Research analyst Angelo Zino kept his Buy ratings on both Alphabet and Apple following the news. The headlines likely confirm "that AAPL's internal [AI] efforts are well behind those of OpenAI and Gemini," Zino says, adding that they also show "the company is serious about adding significant AI capabilities" to its new iPhones.
Additionally, Zino believes that Alphabet's Google "is best positioned to win any external deal for AI on AAPL's devices given the strong search partnership the two already have."
Tesla soars after raising Model Y prices in Europe
It was a solid day for each of the Magnificent 7 stocks. While Alphabet's rally was indeed notable, Tesla (TSLA) was the best performer of the bunch. Specifically, TSLA stock rose 6.3% after the company said it raised the price of several of its Model Y electric vehicles in Europe.
Last week, Wells Fargo analyst Colin Langan downgraded the mega-cap stock to Sell from Hold, saying he expects recent price cuts to its electric vehicles to have "a diminishing impact on demand."
March Fed meeting starts tomorrow
Meanwhile, investors are keeping a close watch for any Fed-related headlines, with the central bank set to kick off its two-day policy meeting tomorrow.
No change to the federal funds rate is expected to be announced when the gathering concludes Wednesday afternoon, but the Fed's "dot plot," which summarizes what each member expects monetary policy to be going forward, could signal where the central bank expects it to be at the end of the year.
"Hotter-than-expected inflation data to start the year argue for a hawkish-leaning message from the Fed at the March FOMC meeting," says a team of economists at Deutsche Bank. "That said, in a very close call, we do not yet expect this to manifest in the Fed signaling less easing this year."
While the economists do anticipate a mild upward revision to the Fed's inflation forecasts for this year, "we expect the median dot to stay at three cuts for 2024."
According to CME Group's FedWatch Tool, futures traders are currently pricing a 34% chance the Fed will cut interest rates by a full percentage point this year, with the first quarter-point rate cut expected in June.
Related content
- Target Limits Self-Checkout To 10 Items
- Kiplinger's Economic Calendar for This Week
- Kiplinger's Earnings Calendar for This Week
-
Stocks Close Out Strong Month With Solid Amazon Earnings: Stock Market TodayAmazon lifted its spending forecast as its artificial intelligence (AI) initiatives create "a massive opportunity."
-
I Just Paid Off My Car. Can I Downgrade My Car Insurance Now?You've gotten rid of that car payment. Can you save even more by downgrading your car insurance? Here's what to consider.
-
Stocks Close Out Strong Month With Solid Amazon Earnings: Stock Market Today
Amazon lifted its spending forecast as its artificial intelligence (AI) initiatives create "a massive opportunity."
-
Are You Retired? Here's How to Drop the Guilt and Spend Your Nest EggTransitioning from a lifetime of diligent saving to enjoying your wealth in retirement tends to be riddled with guilt, but it doesn't have to be that way.
-
Government Shutdown Freezes National Flood Insurance Program: What Homeowners and Buyers Need to KnowFEMA's National Flood Insurance Program is unavailable for new customers, increased coverage or renewals during the government shutdown.
-
Separating the Pros From the Pretenders: This Is How to Tell if You Have a Great AdviserDo you leave meetings with your financial adviser feeling as though you've been bulldozed into decisions or you're unsure of what you're paying for?
-
What Netflix Stock's 10-for-1 Split Means for InvestorsNetflix announced its long-awaited stock split after Thursday's close. NFLX will start trading on a split-adjusted basis ahead of the November 17 open.
-
Stocks Sink with Meta, Microsoft: Stock Market TodayAlphabet was a bright light among the Magnificent 7 stocks today after the Google parent's quarterly revenue topped $100 billion for the first time.
-
Five Downsides of Dividend Investing for Retirees, From a Financial PlannerCan you rely on dividend-paying stocks for retirement income? You'd have to be extremely wealthy — and even then, the downsides could be considerable.
-
Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market TodayNvidia became the first company ever to boast a $5 trillion market cap, but it wasn't enough to lift the Dow and the S&P 500.
