Nasdaq 100: Tech Stocks Lead US Indices Higher on Dovish Fed and Tesla Rally

Wall Street Trades Higher on Fed Rate Cut Signal; Tesla Soars on Robotaxi Launch

U.S. stocks were higher Monday afternoon as dovish comments from Fed Governor Michelle Bowman and a sharp rally in Tesla lifted sentiment. Investors appeared to downplay Middle East risk after U.S. airstrikes in Iran, focusing instead on potential Fed policy easing.

Bowman, speaking as the Fed’s top banking regulator, flagged growing job market concerns and downplayed inflation risks from tariffs, suggesting rate cuts could come sooner than previously expected. Her remarks supported risk assets, which had been pressured by recent geopolitical tension.

Indexes Hold Gains With S&P 500 Up 0.3%

By midday, the S&P 500 was up 0.28% at 5,984.56, the Nasdaq gained 0.40%, and the Dow added 30 points. Consumer discretionary was the strongest sector, up nearly 2%, led by Tesla’s outperformance. Energy stocks lagged as crude oil gave back early gains.

Nine of 11 S&P sectors traded in positive territory. Despite broader strength, the S&P remains roughly 2.7% below its all-time high, with traders cautious ahead of key economic data later in the week.

Oil Slips Despite Iran Tensions; Is Inflation Risk Fading?

Crude dropped more than 1% to $76.20 a barrel after hitting a five-month high. While Tehran threatened retaliation after U.S. strikes on Iranian nuclear facilities, regional oil flows continued uninterrupted. That eased immediate concerns about a supply squeeze.

The Fed previously warned of inflation risks tied to higher trade duties, but stable oil prices and softer business activity data released Monday may help temper inflation expectations for now.

Tesla Rips Nearly 10% on Self-Driving Test Rollout

Tesla shares jumped 9.7% after the company launched a small fleet of robotaxis for paying riders in Austin, Texas. The move added momentum to the stock and bolstered the consumer discretionary sector.

Other notable movers included Northern Trust, up 6.9% on reports of merger interest from Bank of New York Mellon. Super Micro Computer fell 6% after unveiling a $2 billion convertible bond offering. Novo Nordisk dropped over 5% after new obesity drug data underwhelmed.

Eyes on Powell and PCE Inflation Data

Markets are now bracing for the Fed’s preferred inflation gauge—core PCE—due later this week, along with final GDP revisions. Fed Chair Jerome Powell’s two-day testimony before Congress is also in focus, as traders look for clarity on the timing and scale of any potential rate cuts.

For now, Fed dovishness and contained oil risks are helping stocks hold gains, but traders remain alert to any escalation from Iran or upside surprises in inflation data.

More Information in our Economic Calendar.