NASDAQ Index, SP500, Dow Jones Forecasts – US Stocks Rise on AI and Fed Bets

Nasdaq Hits Record High as AI Stocks Rally; S&P 500 and Dow Edge Higher Ahead of Inflation Data

The Nasdaq Composite closed at a fresh record high Monday, supported by a rally in major technology names as traders positioned ahead of key inflation reports later this week. The index rose 0.45% to 21,798.70, touching an intraday high in the process. The S&P 500 advanced 0.21% to 6,495.15, while the Dow Jones Industrial Average gained 114 points, or 0.25%, to finish at 45,514.95.

Investors remain focused on inflation signals after Friday’s soft jobs report heightened expectations for potential interest rate cuts at the Federal Reserve’s upcoming meeting.

What led the Nasdaq to another record close?

Tech stocks continued their upward march, driven by enthusiasm for artificial intelligence and cloud infrastructure. Broadcom jumped over 3% following renewed bullish sentiment surrounding AI chip demand. Nvidia rebounded 0.77%, while Adobe and Cadence Design Systems climbed more than 2.7% each. Other top gainers included AppLovin, which surged 11.6%, and Zscaler, up 2.7%.

Strength was seen beyond the top names, suggesting broader participation across the tech sector. Despite a minor decline in Apple (-0.76%), bullish momentum in Microsoft (+0.65%), Amazon (+1.51%), and Palantir (+1.95%) helped underpin gains.

The technology sector led all S&P segments with a 0.67% advance, while communication services and consumer discretionary posted modest strength. Investors are anticipating Wednesday’s PPI and Thursday’s CPI reports for August as the next catalysts to assess inflationary pressures and potential Fed policy shifts.

How did the Dow perform and which stocks stood out?

The Dow Jones posted a modest gain, remaining just below last week’s high of 45,757.84. IBM (+3.04%) was the top performer in the index, followed by Walmart (+1.76%) and UnitedHealth (+1.54%). Disney and Boeing also contributed positively.

However, weakness was seen in defensive names. Verizon fell 2.39%, and Amgen declined 1.22%. Coca-Cola, Merck, and McDonald’s were also in the red, reflecting rotation away from defensive and healthcare names toward growth-focused sectors.

Industrials and financials posted mild gains, while real estate and utilities underperformed with the latter down over 1% on the session.

What was the tone across the S&P 500 sectors?

The S&P 500 saw a relatively even performance, with eight of eleven sectors ending higher. Take-Two Interactive led the index with a 3.8% gain, joined by Uber (+3.7%) and GE Healthcare (+3.2%). ServiceNow, Adobe, and MSCI also posted notable gains.

On the downside, CVS Health dropped nearly 5%, while Brown-Forman, Keurig Dr Pepper, and T-Mobile lost over 3% each. The real estate and utilities sectors weighed on the broader index, highlighting investor hesitation around rate-sensitive stocks ahead of macro data.

What’s next for traders this week?

All eyes are now on the August inflation data. Wednesday’s PPI and Thursday’s CPI readings will be critical in shaping expectations for Fed policy at the September 18 meeting. Following last week’s weaker job growth figures, traders are increasingly pricing in a potential rate cut, with CME’s FedWatch tool showing rising odds for a 25 to 50 basis point reduction.

With equity indexes sitting near all-time highs during a seasonally slow period, traders will be watching closely for signs of overextension or any surprises in economic data that could spark volatility.

More Information in our Economic Calendar.