By Shristi Achar A and Shubham Batra
(Reuters) – Wall Street rose on Monday as Tesla (NASDAQ: TSLA) led gains in megacaps, while investors awaited inflation data due later this week for clues on the U.S. Federal Reserve’s interest-rate path.
Tesla jumped 5.8% as Morgan Stanley upgraded it to “overweight” from “equal-weight”, saying the EV maker’s Dojo supercomputer could boost the company’s market value by nearly $600 billion.
Shares of other megacaps including Alphabet (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) rose between 0.4% and 1.1%.
The S&P 500 consumer discretionary stocks, up 1.6%, led gains in major S&P 500 sectors.
Investors now await the crucial consumer and producer prices data as well as retail sales numbers due later this week.
The consumer price data on Wednesday will indicate whether the U.S. economy is on track for a so-called soft landing that could allow the Fed to bring down inflation without sharply impacting growth.
“The inflation numbers should be expected to be at least flat if not higher and most likely slightly higher as compared to the continued decline we’ve seen since last year, said Hugh Anderson, managing director at HighTower Advisors.
“I expect at least one more increase, but this is at best. Certainly no cuts, and I don’t expect to see cuts for quite some time until we see a dramatic decline in employment.”
Wall Street’s main indexes had logged weekly losses on Friday after a recent uptick in oil prices and stronger-than-expected economic data fueled concerns of sticky inflation and interest rates staying higher for longer.
Traders see a 93% chance of the central bank holding its interest rates at current levels in the September meeting, while their odds for a pause in November stand at nearly 61%, according to CME FedWatch Tool.
Treasury yields inched up on Monday, with yields on 2-year note, considered to best reflect short-term interest rate expectations, hovering around 4.9948%.
Fed officials have entered a blackout period, during which they usually do not make public comments, until the policy decision outcome on Sept. 20.
At 9: 47 a.m. ET, the Dow Jones Industrial Average was up 156.55 points, or 0.45%, at 34,733.14, the S&P 500 was up 19.46 points, or 0.44%, at 4,476.95, and the Nasdaq Composite was up 71.42 points, or 0.52%, at 13,832.94.
Among other stocks, Qualcomm (NASDAQ: QCOM) advanced 3.6% after the chipmaker signed a new deal with Apple (NASDAQ: AAPL) to supply 5G chips to the iPhone maker until at least 2026.
Hostess Brands (NASDAQ: TWNK) jumped 18.8% after J. M. Smucker said it would buy the Twinkies-maker in a $5.6 billion deal.
Meta Platforms (NASDAQ: META) added 1.8% after a report on Sunday said the firm was working on a new, more powerful artificial-intelligence system.
Advancing issues outnumbered decliners by a 3.46-to-1 ratio on the NYSE and by a 2.01-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and five new lows, while the Nasdaq recorded 14 new highs and 46 new lows.