Stocks kicked off the week on a positive note, ahead of key macro events in the upcoming days, including the May inflation rate figure on Tuesday and the Federal Reserve's monetary policy decision on Wednesday.

The S&P 500 Index, closely monitored by the SPDR S&P 500 ETF Trust (NYSE:SPY), reached its August 2022 highs at 4,320 points and is on track to reach 10-month highs by the end of today's session.

While large tech companies continue to drive the overall stock market higher, oil stocks are struggling due to a significant drop in crude oil prices. Investors remain confident that the Fed will keep interest rates unchanged, delivering a pause to the previous 15-month hiking cycle, with a 75% probability priced by the latest CME Group FedWatch tool.

Chart Of The Day: S&P 500 Index Approached August 2022's Highs

Cues From Monday's Trading:

The Nasdaq 100 continues to outperform other major U.S. averages, up 0.8% on the day, reflecting the tech-sector dominance.

The S&P 500 was up 0.4%, while the Dow Jones rose by 0.3%. Small caps were also quite upbeat, with the Russell 2000 Index up 0.8%. 

U.S. Indices’ Performance on Monday

Analyst Color:

LPL Financial chief technical strategist Adam Turnquist weighed in on the recent market rally. The S&P 500's entry into a new bull market suggests the Oct. 12 low can now be labeled as a bear market low, the analyst said.

Turnquist noted that it took 165 trading days for the index to surpass the 20% threshold of the bear market low, marking the second-longest period to confirm a new bull market in nearly 75 years.

The LPL analyst sees more gains ahead. Drawing on historical forward after the commencement of a bull market, he noted that the average and median return 12 months after a bull market officially starts were 18-19%.

The Energy Select Sector SPDR Fund (NYSE:XLE) was the daily worst performer, down 1.1%.

Latest Economic Data:

The Federal Reserve of New York revealed the consumer inflation expectations survey for May, showing that year-ahead expectations fell to 4.1% in May 2023, the lowest since March 2021, down from 4.4% in April.

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Stocks In Focus:

Carnival Corp. (NYSE:CCL) rose 14% on the day, after both JPMorgan and Bank of America upgraded the company and raised the price targets. 

Airbnb, Inc. (NASDAQ:ABNB) rose 5%, after France's finance ministry announced that it is working on plans to close a tax loophole benefiting short-term furnished rentals.

Sofi Technologies, Inc. (NASDAQ:SOFI) rose nearly 10% after Truist Securities analysts led by Andrew Jeffrey lifted their price target from $8 to $11. 

Nasdaq, Inc. (NASDAQ:NDAQ) fell 12%, as the company said it would pay $10.5 billion in cash and stock to acquire financial software developer Adenza from Thoma Bravo, making this the largest acquisition for Nasdaq.

Commodities, Bonds, Other Global Equity Markets:

Crude oil plunged 3.9%, with a barrel of WTI-grade crude falling to $67.56. The United States Oil Fund ETF (NYSE:USO) was 3.8% lower to $60.6 per share.  

Treasury yields were unchanged in the short and belly part of the curve, with the 10-year yield flat at 3.79% and the two-year yield flat at 4.60%. The 30-year yield rose 5 basis points to 3.93%, pushing the iShares 20+ Year Treasury Bond ETF (NYSE:TLT) 0.6% lower for the day. 

The dollar strengthened, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), up 0.2%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), was flat at 1.0750.

European equity indices rose across the board. The SPDR DJ Euro STOXX 50 Etf  (NYSE:FEZ) rose 0.9%. 

Staff writer Piero Cingari updated this report midday Monday. 

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