S&P 500 closes at highest level since April 2022 as traders hope the Fed will skip a rate hike: Live updates

Tesla rises for a record 12th straight day. Here's how to play the stock
Tesla rises for a record 12th straight day. Here's how to play the stock

The S&P 500 jumped to its highest level in 13 months on Monday as traders hoped the Federal Reserve will skip hiking rates when the central bank decides on policy Wednesday.

The S&P 500 added 0.93% to close at 4,338.93, with gains steadily increasing throughout the trading day. The benchmark surpassed its high from last August and reached the best intraday and closing levels since late-April 2022. The Nasdaq Composite popped 1.53% to finish the day at 13,461.92, also reaching its highest levels since April 2022. The Dow Jones Industrial Average climbed 189.55 points, or 0.56%, to close at 34,066.33.

Markets have come to expect that the Fed will skip a rate increase at this week's meeting, with traders pricing in a roughly 72% chance that there will be no hike, according to the CME Group's FedWatch tool. The Fed has hiked 10 consecutive times since starting this latest policy-tightening cycle in March 2022.

Tuesday's inflation data could help reinforce the case that inflation is subsiding, as economists expect the consumer price index to show inflation dropping to a 4% annual rate in May. That's down from 4.9% in the prior month.

The central bank will ultimately decide to skip a rate hike for June, according to Certuity co-chief investment officer Dylan Kremer, but the Fed likely isn't done raising rates overall.

"We don't necessarily believe that there's no more hikes in the cards, but we do think it's a 50/50 chance of another hike happening in this cycle," Kremer said. "All else equal, [the CPI report] could be a short-term tailwind as markets continue to grind higher."

However, market expectations are that Fed officials will emphasize a commitment to keep inflation at bay and come back with a final rate increase at July's meeting before going on hold for the rest of the year.

Stock Chart IconStock chart icon
hide content
S&P 500 since April 2022

The S&P 500 last week reached a significant milestone, gaining more than 20% off its October low. The move caused many investors to signal the bear market is over. The benchmark has been on a bit of a hot streak, gaining four weeks in a row. The Nasdaq Composite has been on an even bigger tear, up 33% from its 52-week low.

The Nasdaq and technology stocks led the way on Monday again, with Amazon and Tesla each up more than 2%.

Stocks finish higher, S&P 500 notches best close in 13 months

Stocks closed higher on Monday as investors added to optimism that the central bank could skip a rate hike at their policy meeting this week.

The S&P 500 added 0.93% to close at 4,338.93, while the Nasdaq Composite popped 1.53% to finish the day at 13,461.92. The Dow Jones Industrial Average climbed 189.55 points, or 0.56%, to close at 34,066.33.

Investors will also look toward fresh inflation data this week, with the consumer price index for May due out Tuesday.

— Brian Evans

These five stocks should benefit most from A.I.

Technology stocks connected to artificial intelligence have surged this as enthusiasm for these tools gains steam. But Needham sees five specific big technology names as the biggest winners in the race.

Analyst Laura Martin highlighted Alphabet, Microsoft, Amazon, Apple and Meta Platforms as the top beneficiaries given their size, scope, and financial prowess, enabling them build and maintain AI models, and harness the talent.

Among theses names, the three biggest cloud providers stand to "win most and fastest," Martin said. She expects these brands to have lower costs and higher revenues as other companies pay steep fees to access their models.

"Also, Cloud services get much more sticky after a business builds an app on their [foundation models]," she said.

— Samantha Subin

Relatively light trading day as Wall Street gears up for Fed meeting

It's a relatively quiet day on Wall Street as investors look to the Federal Reserve meeting set for the middle of the week.

Just over 31.5 million shares of the SPDR S&P 500 ETF Trust, a tracker of the broad S&P 500 index, have exchanged hands as of 2 p.m. ET with just two hours left in the trading day. In an average full day over the last 30 sessions, about 80.6 million shares were traded.

That low volume underscores the typical calm-before-the-storm period seen early in weeks with a Fed meeting on the docket. Investors will watch Wednesday's announcement and press conference for any changes to the path of interest rate hikes and commentary from Fed Chair Jerome Powell around the state of the economy and future monetary policy.

Before that, consumer price index data due Tuesday will also be watched given its connection to inflation.

— Alex Harring

Ray Dalio calls A.I. fabulous and dangerous

Billionaire investor Ray Dalio believes artificial intelligence could be transformative but it could also inflict harm if it's not used appropriately.

"It's going to be fabulous ... and dangerous," Dalio said on CNBC's "Squawk on the Street." "The only issue is the power. It's the people and how the how the technology is used as the risk.... It can either produce a tremendous amount of productivity.... Or it can be used in this war in various ways to hurt each other."

The founder of Bridgewater, one of the world's largest hedge funds, said the effective users of AI, or companies that use AI to enhance their productivity, will make very attractive investments.

"I don't care if it's in biology, hospitals, I don't care if it's in agriculture, there will be those who want to stand it and know how to make the most of it. And there will be those who will be slow to make the most of them and those that are able to make the most of them will be the disruptive companies," Dalio said.

— Yun Li

Brazil's Petrobras attracts second Wall Street upgrade in less than a week

Brazil's Petrobras was upgraded to overweight from neutral at JPMorgan on Monday, attracting its second upgrade in less than a week after