by Sinéad Carew and Bansari Mayur Kamdar
(Reuters) – The New York Stock Exchange ended higher on Monday, driven by tech giants such as Alphabet and Tesla, ahead of a midweek meeting of the Federal Reserve which is not yet expected lead to a rate cut.
The Dow Jones index gained 0.2%, or 75.66 points, to 38,790.43 points.
The broader S&P-500 gained 32.33 points, or 0.63%, to 5,149.42 points.
The Nasdaq Composite rebounded by 130.27 points (0.82%) to 16,103.45 points, after three sessions of decline.
This rebound in the index with a strong technological component was favored by the clear progression of Alphabet (+4.6%) after information from Bloomberg according to which Apple (+0.64%) is in talks to integrate the engine of Google’s Gemini artificial intelligence (AI) in its iPhone.
The prospects opened up by AI have been fueling investor optimism for several months and this enthusiasm continued to support the markets this Monday with the start of the GTC conference for Nvidia developers, which is due to continue until the end of the week.
However, Nvidia shares were volatile on Monday before ending up 0.7%.
Tesla also contributed to the positive trend with a gain of 6.3%, after the electric vehicle manufacturer announced an upcoming increase in the price of its Model Y in certain countries.
The appetite for risk fueled by the rise of AI is, however, qualified by the uncertainties surrounding the evolution of monetary policy in the United States.
Investors do not expect a rate cut from the Fed at this week’s meeting but will be attentive on Wednesday to any statement that could clarify the timing of the expected easing this year as inflation has slightly accelerated again last month in the United States according to data published last week.
Goldman Sachs said on Monday that it now expected three rate cuts this year in the United States, compared to four previously anticipated.
“With the market sitting near recent highs, it’s very difficult to imagine what could ignite a spark to the upside from where we are. It’s not hard to imagine that “There’s some potential for disappointment,” said Sameer Samana, senior global markets strategist at Wells Fargo Investment Institute, citing Fed policy and high valuations in the tech sector.
(Written by Sinéad Carew in New York, Bansari Mayur Kamdar and Shashwat Chauhan in Bangalore, Bertrand Boucey)
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