June 5 (Reuters) – The S&P 500 and Nasdaq rose on Monday, as Apple Inc climbed to all-time highs and investors weighed chances that the Federal Reserve will pause interest rate hikes at its next policy meeting.
Shares of Apple Inc (AAPL.O) rose 1.8% to an all-time high ahead of its annual developer conference later in the day, where the iPhone maker is widely expected to announce a new mixed reality headset.
Other growth stocks were also higher, with Alphabet Inc (GOOGL.O) up 1.8% and Amazon.com Inc (AMZN.O) up 0.9%.
US stocks rose on Friday after a report showed that wage growth moderated in May, raising hopes that the central bank may skip an interest rate hike next week, while investors cheered Washington’s deal that averted a catastrophic debt default.
Traders have priced in a near 80% chance that the Fed will suspend interest rates at its policy meeting scheduled for June 13-14, according to CME Group’s Fedwatch, although they expect another hike in July.
“We are now waiting for the next major data point and determining whether the Fed will skip, pause or walk,” said Thomas Hayes, Chairman of Great Hill Capital LLC.
A stronger-than-expected earnings season and hopes that the Federal Reserve will pause its aggressive monetary-policy tightening cycle have boosted US stock markets in recent months, with the recovery putting the S&P 500 on track to close 20% above its October 2022 lows.
A survey from the Institute for Supply Management showed that the US services sector barely grew in May as new orders slowed, pushing a measure of the prices businesses pay for inputs to a three-year low, which could help the Fed’s fight against inflation.
said Sam Stovall, chief investment analyst at CFRA Research.
At 12:02 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 84.58 points, or 0.25%, at 33,678.18, the S&P 500 (.SPX) was up 9.23 points, or 0.22%, at 4,291.60, and the Nasdaq was up 9.23 points, or 0.22%, at 4,291.60. . The Composite Index (.IXIC) rose to 13,301.08 points, or 0.46%.
Palo Alto Networks Inc (PANW.O) rose 5.5% as the cybersecurity firm appears poised to replace Dish Network (DISH.O) in the S&P 500. Dish shares fell 1.0%.
Major US banks fell after the Wall Street Journal reported that US regulators were preparing to tighten rules for large banks, which could include increasing capital requirements by an average of 20%.
Tesla Inc (TSLA.O) gained 1.6% after the electric car maker’s sales of China-made cars jumped in China in May.
Declining issues outnumbered advancers by 1.56 to 1 on the NYSE and 1.35 to 1 on the Nasdaq.
The S&P recorded 14 new highs in 52 weeks and two new lows, while the Nasdaq recorded 70 new highs and 32 new lows.
Additional reporting by Sruthi Shankar and Shristi A. Achar in Bengaluru; Editing by Vinay Dwivedi and Anil D’Silva
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