Stocks close higher as tech rebounds, S&P snaps three-day losing streak: Live updates

The major stock indexes ended Monday's session higher, reversing some of their losses from the past two weeks.

The S&P 500 added 0.63% to end at 5,149.42, while the Dow Jones Industrial Average gained 75.66 points, or 0.2%, to finish at 38,790.43. The tech-heavy Nasdaq Composite climbed 0.82% to settle at 16,103.45.

— Lisa Kailai Han

Inflation has taken a toll on retail spending, Bank of America reported in its latest consumer spending report.

The bank found that card spending was weak in February, with the biggest month-over-month declines hitting the groceries and general merchandise sectors. However, the bank chalked this up to severe weather effects in January, leading consumers to stock up on daily supplies.

"More broadly, retail (i.e., goods and food services) spending has been slowing down over the last few quarters, as goods inflation has fallen sharply and services inflation has remained elevated," the bank added. "The risk is that sticky services inflation will further shrink retail's wallet share, to the extent that real spending also slows down."

— Lisa Kailai Han

At their current levels, Barclays believes that stocks appear more appealing to investors than fixed income investments.

"We still like global equities but are puzzled by enduring strength in USTs, as term premium looks too compressed," wrote analyst Ben McLannahan.

McLannahan added that the global economy appears to be pulling off a "softish landing," with U.S. performance dominating the macroeconomic landscape. On the other hand, he wrote that fears of the U.S. overheating "seem exaggerated."

— Lisa Kailai Han

Heading into the last hour of trading on Monday, all 11 sectors were up for the day.

Increases were led by the communications services sector, which was 2.7% higher, followed by consumer discretionary, information technology and consumer staples. Real estate and healthcare were the laggards, with the sectors notching a respective 0.1% and just under a 0.1% gain.

— Lisa Kailai Han

The stock market has been on an upwards tear since last fall, with all three major indexes notching new record closes already in 2024.

But there are already several signs that doubt is beginning to creep into market optimism, according to Deutsche Bank.

"When the rally is that fast, it's always hard to maintain the speed of those gains. Moreover, there are signs that inflation is still proving persistent, with investors moving to price out the chance of rate cuts in response," wrote macro strategist Henry Allen.

In a Monday note, Allen shared five signs of a potential narrative shift:

1. "For the first time since October, the S&P 500 has now posted 2 consecutive weekly declines."
2. "There are clear signs that inflation is proving more persistent than expected a couple of months back."
3. "More inflation has led investors to dial back their expectations for rate cuts this year."
4. "The speed of the current equity rally has been very rapid, and history suggests it was always going to be hard to maintain that speed."
5. "When inflation is already above target, then easier financial conditions risk leading to a hawkish reaction from central banks."

— Lisa Kailai Han

An artificial-intelligence partnership between Apple and Alphabet would be a win for both companies, analysts said Monday.

A report from Bloomberg said Monday Apple was in talks with Alphabet to license Gemini, its suite of generative AI tools, for future iPhones. Apple has also had discussions with OpenAI, the report said.

"A partnership that can incorporate GenAl features faster into iPhones (software features in 2024) and incremental hardware features in 2025 would be a positive for both Apple and for the potential partner if Apple ends up with an agreement," Bank of America analyst Wamsl Mohan said in a note Monday.

He sees an Al-driven multi-year upgrade cycle for Apple and the potential for gross margins to re-rate higher.

Meanwhile, Melius Research said a Google partnership would be a "reputational win" for the tech giant against Microsoft and OpenAI. Apple would get the bigger immediate win financially on a deal since it will allow it to take an asset-light approach to AI, analyst Ben Reitze said in a note Monday.

However, he wouldn't to count Microsoft out of the story just yet.

"A bidding war for Apple's digital real estate isn't a bad thing for its shareholders," he said.

Shares of Alphabet were up nearly 7% in midday trading, while Apple gained more than 2%.

— Michelle Fox

30 stocks in the S&P 500 hit new 52-week highs during Monday's trading session. Of these names, 24 stocks hit new all-time trading highs today.

Here's a look at some of the stocks that reached this milestone:

• Chipotle Mexican Grill trading at all-time high levels back to its IPO in Jan, 2006
• Progressive trading at all-time highs back to its IPO in 1971
• Caterpillar trading at all-time high levels back to when it first began trading on the NYSE in 1929
• Motorola Solutions trading at all-time highs back to its when it began trading as a separate entity post the Motorola Mobility split
• PACCAR trading at all-time high levels back to its IPO in 1971
• Waste Management trading at all-time high levels back through our history to July, 1988
• O'Reilly Auto trading at all-time high levels back to its IPO in Apr, 1993

— Lisa Kailai Han, Christopher Hayes

Check out some of the companies making headlines in midday trading.

• Nvidia — Shares climbed about 3% in light of the company's GTC Conference. Investors see the event as a bellwether for artificial intelligence, as Nvidia is expected to unveil new products and updates.

• Zillow — Shares pulled back 3%, adding to Friday's 13% pullback. The stock came under pressure after the National Association of Realtors reached a settlement with home sellers that could lead to lower commissions for realtors.

• Alphabet, Apple — Shares of the Google parent company gained nearly 7% following a Bloomberg report that said Apple was discussing licensing Alphabet's Gemini artificial intelligence engine into the iPhone. Apple climbed roughly 2%.

Read the full story here.

— Brian Evans

The communication services sector outperformed Monday, on track for its best day since Feb. 2 when it gained 4.69%. On Monday, the sector was higher by 3.56% in midday trading.

Shares of Google-parent Alphabet were higher by more than 6%.

— Sarah Min, Fred Imbert

Standard Chartered's head of digital assets research Geoff Kendrick said in a note to clients Monday that he is raising year-end target on bitcoin to $150,000 from $100,000.

That would mean that bitcoin would more than double from its record high of nearly $74,000, where it hit last week.

And the rally may not end there. Kendrick said there is a chance bitcoin can reach $250,000 during 2025.

Read more about Kendrick's outlook on CNBC Pro.

— Jesse Pound

Markets will be looking past what the Federal Reserve does at its meeting this week and thinking more about what the future holds, according to Chris Larkin, the managing director of trading and investing at ETrade from Morgan Stanley.

"No one expects a rate cut on Wednesday, but after last week's double-dose of hot inflation data, everyone will be wondering whether the Fed is rethinking a June cut," Larkin said Monday.

Noting that the S&P 500 broke a record high for the ninth straight week, Larkin expects that "the market will need to like what it sees in the Fed's statement on Wednesday, and get confirmation from (Fed Chair) Jerome Powell that two months of sticky inflation numbers won't derail the Fed's game plan."

Futures market pricing is pointing to the first rate cut coming no sooner than June.

—Jeff Cox

Ahead of Wednesday's FOMC meeting, Senyek shared five of his most critical questions for the Fed, listed below:

1. Fed Cuts: When & how deep? Senyek doesn't expect a change in futures market expectations, which have priced in 75 basis points of rate cuts starting in June.
2. QT Tapering: How fast of an unwind? Senyek believes the Fed will have to dial back faster than expected, but doesn't expect a quantitative tapering plan to be finalized until May or June.
3. Another operation twist? Senyek expects the FOMC to eventually both shift its mortgage-back securities holdings to zero, as well as shift towards a larger share of bills versus bonds and notes. These moves are likely to eventually incrementally steepen the yield curve and widen mortgage spreads, Senyek wrote.
4. Will other central banks follow the Fed? Senyek believes the European Central Bank and Bank of England will follow the Fed to ease around the middle of the year, while the Bank of Japan is moving in the opposite direction.
5. How will the market react? Senyek believes that price-over-earnings ratios won't feel squeezed until the markets fear a slowdown due to the Fed's monetary actions.

— Lisa Kailai Han

Shares of Alphabet rose on Monday morning, after Bloomberg News reported the company was in talks with Apple to include its Gemini AI in iPhones.

Alphabet stock rose more than 7% in its highest daily gain in over a year.

— Lisa Kailai Han

Stocks rose to start Monday's session.

The S&P 500 added 0.9%, while the Dow Jones Industrial Average gained 112 points, or 0.3%. The Nasdaq Composite increased 1.3%.

— Lisa Kailai Han

UBS expects the S&P 500 to end the year modestly higher and is most bullish on quality stocks, strategist Vincent Heaney wrote in a Monday note.

So far this year, the broader market index has managed to hit record high after record, led by AI tailwinds and a tech-induced rally.

"Markets are likely to be choppy amid shifting expectations for central bank policy easing," Heaney wrote. "But we think lower interest rates, positive economic growth, and growing corporate earnings should create a supportive backdrop for equities in 2024."

While the strategist remains neutral on equities overall, he remains constructive on quality companies.

"Quality companies—with strong balance sheets, high profitability, and resilient earnings—should be best positioned to deliver performance, especially if economic growth slows. We see opportunities across regions, including the U.S. IT sector," he said.

Heaney added that discounted valuations and potential catalysts might keep U.S. small caps looking attractive. He also sees opportunities within European small- and mid-cap names.

— Lisa Kailai Han

Check out the companies making headlines before the bell:

• Google — Alphabet Class A shares were trading 5.6% higher following a Bloomberg report that said Apple is in talks with Google to license and build its Gemini artificial intelligence engine into future iPhones.
• Super Micro Computer — Shares gained 2.5%. The technology firm, which makes servers that help with artificial intelligence applications, joins the S&P 500 Monday before trading  begins. The stock has jumped more than twentyfold in the past two years and is up 276% year to date.
• Nvidia — The stock moved 2.7% higher ahead of its highly-anticipated GTC Conference, where the chipmaker is expected to announce various AI updates. Earlier Monday, HSBC upped its price target to $1,050 from $880 a share, saying it is encouraged by Nvidia's AI product roadmap which could one day own "the entire value chain."

For the full list, read here.

— Pia Singh

A new report from Morgan Stanley confirmed investor suspicions that the U.S. market rally is due to widen this year.

"We analyze 6 different breadth measures across S&P 500 sectors and for the overall index by looking at their percent ranks this cycle (since the Covid lows)," wrote strategist Michael Wilson. "Bottom line, breadth has improved over the past month — an average of the percent ranks across these 6 measures for the overall S&P is now 70%, up from 55% a month ago."

Wilson went on to note that the industrials sector currently exhibits the strongest breadth profile versus one month ago. On the other hand, energy, materials, real estate and utilities have exhibited the greatest breadth improvement in the last month.

"The recent broadening within large cap leadership may be how the market is dealing with the inconsistency of higher rates and still elevated multiples for the large cap equity indices," the strategist added.

— Lisa Kailai Han

Investors should disregard concerns over high valuations and focus on growth in what is now a "stockpicker's market," according to Matt Orton, chief market strategist at Raymond James Investment Management.

Orton suggested the recent diverging fortunes of the so-called "Magnificent 7" megacap tech stocks, which have powered much of Wall Street's upward momentum over the last 18 months, was evidence that "we're back to a stockpicker's market" where "fundamentals matter once again."

Much has been made of the high valuations of U.S. stocks. Nvidia trades at around 35 times forward earnings, according to FactSet data, and the broader Magnificent 7 trades at an average of around 34 times forward earnings. The S&P 500, meanwhile, is at a historically high average of 21 times forward earnings.

Tet Orton argued that historical comparisons are irrelevant in a much "growthier" market, and that paying a higher multiple is "perfectly fair" in this changed environment.

"It's all about earnings growth and it's all about leaning into where those fundamentals are, and trying to avoid the parts of the market where you don't have a positive inflection in earnings," Orton said.

"And if you do that, no matter what the valuation is, you can grow into it, and I think that's the main message for investors, is 'find growth.'"

Read the full story here.

— Elliot Smith

Alphabet shares rallied 4% before the bell following a report from Bloomberg that Apple is reportedly in talks with the search giant to license its Gemini AI model to power features in the iPhone.

The report, citing people familiar with the matter, said that both companies have held "active negotiations" for Gemini to run some features slated to rollout with new iPhone software later this year. Bloomberg also reported that Apple has held talks with OpenAI.

Apple shares were last up about 0.3%.

— Samantha Subin

Goldman Sachs said monthly inflows into India's domestic equity funds rose to a 23-month high of $3.2 billion in February, based off data from the Association of Mutual Funds in India.

Inflows into equity funds through systematic investment plans or SIPs remained strong, GS said as it hit fresh highs of $2.3 billion.

India also saw foreign inflows of $2.2 billion in the week ending March 15, according to GS.

The country's Nifty 50 index dipped 0.3% on Monday after falling over 2% last week.

— Shreyashi Sanyal

China reported stronger-than-expected numbers for retail and fixed asset investment for the first two months of 2024.

Retail sales rose 5.5% and industrial production was up 7%, both beating analysts' expectations. The unemployment rate for cities was 5.3% in February.

Investment into real estate dropped 9% year on year in January and February, while manufacturing rose 9.4% during that time.

China's data for January and February is typically combined to smooth out variations from the Lunar New Year, the country's biggest national holiday, during which businesses remain shut for at least one week.

— Evelyn Cheng

Japan's Nikkei 225 rose more than 2% on Monday, crossing the 39,000 mark for the first time in 10 days as manufacturing and health-care stocks powered the rally.

However, the largest gainer on the index was financial technology company Rakuten Group, which surged 7.38%.

Other names on the top gainers list include automaker Nissan which climbed over 6.5% , as well as pharmaceutical firm Chugai Pharmaceutical, which was up 4%.

The yen weakened by 0.18% on the back of the index's rally, trading at 149.29 against the greenback.

— Lim Hui Jie

Federal Reserve Chair could offer less clarity during the central bank's policy meeting beginning on Tuesday, according to EY chief economist Gregory Daco.

"We look for Fed Chair Powell to be less transparent than he was in January regarding the May and June meetings being 'live' for potential rate cuts," Daco said in a Friday note. "However, we do anticipate he will stress that Fed policymakers have started discussing policy easing as well as the timing and logistics of tapering the balance sheet quantitative tightening process."

— Brian Evans

Stock futures were little changed on Sunday, as Wall Street waits for insight on interest rate cuts ahead of the Federal Reserve's policy meeting this week.

Dow Jones Industrial Average futures slipped 20 points, or 0.05%, while Nasdaq-100 futures ticked up 0.1%. Futures tied to the S&P 500 hovered near the flatline

— Brian Evans