Nasdaq and S&P500: US Stocks Rally as Nvidia Recovers, Tesla and Alphabet Jump

S&P 500, Nasdaq Set Fresh Highs as Traders Brace for Federal Reserve Decision

U.S. stocks climbed to record levels on Monday, with the S&P 500 and Nasdaq Composite both notching intraday highs as investors positioned ahead of this week’s pivotal Federal Reserve policy meeting. Sentiment was bolstered by a surge in Tesla shares and ongoing strength in mega-cap tech stocks, even as caution lingered over upcoming economic data.

Tesla led gains with a 6% rally—its highest level since January—after filings showed CEO Elon Musk purchased nearly $1 billion worth of shares on Friday. The move fueled a broader rally in consumer discretionary stocks, pushing the sector up 1.7% to a nine-month peak.

At 17:39 GMT, the S&P 500 was up 0.40% at 6,610.59, while the Nasdaq Composite gained 0.78% to 22,314.68. The Dow Jones Industrial Average rose 0.04% to 45,853.62.

Is the Federal Reserve About to Cut Rates?

All eyes are on the Fed’s policy decision this week, with traders pricing in 68.6 basis points of total easing by year-end, according to LSEG data. While recent inflation numbers were mixed, softer labor market signals have increased bets on a possible 25-basis-point rate cut. Markets will closely analyze Fed Chair Jerome Powell’s remarks for clues on the pace and scope of any easing.

Traders are especially focused on Tuesday’s retail sales report, which is among the final economic readings before the Fed meets. A strong print could temper rate-cut expectations, while weakness would likely reinforce dovish sentiment.

Which Stocks and Sectors Are Moving the Tape?

Beyond Tesla, Alphabet continued its run, reaching a new high and surpassing a $3 trillion market cap. The stock gained 3.4%, boosting the communication services sector, which rose 1.88%.

Nvidia recovered from early losses as it contended with regulatory scrutiny from China over antitrust concerns. Other chip stocks also pared declines tied to China’s probes into U.S. semiconductor practices.

Intel climbed 3.8% after lowering its full-year expense outlook, while data center operator CoreWeave jumped 6.2% on a $6.3 billion supply agreement with Nvidia. Elsewhere, declines in Sherwin-Williams and McDonald’s capped broader gains in the Dow, which remained largely flat.

Are Broader Indexes Holding Their September Gains?

Despite September’s reputation as a historically weak month for stocks, major indexes have held up well. The S&P 500 and Nasdaq posted back-to-back intraday records, helped by ongoing tech leadership. Sector breadth was mixed, with gains in consumer discretionary, tech, and communication services outweighing declines in healthcare and consumer staples.

What’s Next for Markets This Week?

Focus now shifts to the Fed’s rate decision and Powell’s tone on future policy moves. Tuesday’s retail sales report will be key for gauging consumer resilience, especially following last week’s stronger-than-expected inflation data. Traders should also watch for fresh headlines out of China and any updates on chip sector regulation, both of which could sway tech sentiment in the short term.

More Information in our Economic Calendar.