NEW YORK (AP) — A rally in Big Tech stocks on Monday helped Wall Street recoup nearly half of last week’s losses.
The S&P 500 rose 29.97, or 0.7%, to 4,487.46, its first losing week in the last three. The Dow Jones Industrial Average rose 87.13 points, or 0.3%, to 34,663.72, and the Nasdaq Composite climbed 156.37, or 1.1%, to 13,917.89.
Like last week, some big technology-oriented stocks led the way. Tesla jumped 10.1%, Amazon climbed 3.5% and Meta Platform rose 3.2%.
Tech stocks were leading the market’s decline last week as yields rose. Higher yields hurt all types of stocks, but high-growth stocks are hardest hit. Yields rose last week after reports showed the U.S. economy remains stronger than expected, which could add further fuel to pressure to keep inflation high.
This coming week will offer a big data point for the Federal Reserve, which is considering whether to continue raising interest rates in its effort to get inflation back to 2%. On Wednesday, the U.S. government will offer the latest monthly update on prices consumers are paying across the economy, forecasting they were 3.6% higher in August than a year earlier.
The Fed has already raised its key interest rate to the highest level in more than two decades, and has said it will take further steps based on inflation and the performance of other parts of the economy. Inflation has fallen from last year’s high of 9%, but economists have warned that the ultimate recovery to reach the Fed’s target may be the hardest to achieve.
Fed officials are now skipping a speech ahead of next week’s meeting on interest rates, saying “the data will do all the talking this week,” Deutsche Bank economists said in a report.
Those economists say a report Thursday on wholesale-level inflation will be as important as consumer-level inflation data. He says higher wage increases in the health care industry could lead to inflation there.
A separate report on Thursday will also show how much U.S. households spent at retailers last month. Recent strong spending there has helped the economy avoid a long-expected recession. But it could encourage companies to keep trying to raise prices, which could push inflation upward.
Yields remained relatively steady on Monday, with the 10-year Treasury yield rising to 4.28% from 4.26% late Friday. The two-year Treasury yield, which lines up more closely with the Fed’s expectations, rose to 5.00% after declining throughout the day, up slightly from 4.99% late Friday.
Most traders expect the Federal Reserve to leave rates where they are at its meeting next week, according to data from CME Group. But many are preparing for another possible hike later this year, while holding back expectations of a rate cut next year.
On Wall Street, Charter Communications rose 3.2% after announcing a deal with Walt Disney Co. to restore access to ESPN and other channels for its Spectrum Video customers. Disney rose 1.2%.
Apple rose 0.7% ahead of Tuesday’s event, where it is expected to release its latest iPhone models. How Apple performs has a huge impact on the market because it is the most valuable stock on Wall Street. This means that its movements weigh more heavily on the S&P 500 and other indexes than any other stock.
Qualcomm rose 3.9% after announcing a deal to supply 5G equipment to Apple for its phone launches from 2024 to 2026.
Aerospace company RTX fell 7.9% after it said a previously announced problem with its Pratt & Whitney aircraft engines could mean a $3 billion to $3.5 billion loss in its operating profit before taxes over the next several years. Could. It says it will remove 700 engines for shop visits over the next few years.
Hostess Brands jumped 19.1% after J.M. Smucker said it would buy the maker of Twinkies and Hohos in a $5.6 billion cash-and-stock deal that also includes $900 million of net debt.
JM Smucker, whose brands run from Folgers to Smucker’s, fell 7%.
Shares of Chinese e-commerce giant Alibaba, which trades in the United States, fell 1.5% after it said its former CEO, Daniel Zhang, would step down as head of its cloud-computing unit.
The company is restructuring after being hit by regulatory crackdowns on the technology and financial sectors.
In stock markets overseas, Japan’s Nikkei 225 fell 0.4% after Bank of Japan Governor Kazuo Ueda reportedly signaled he would allow interest rates to rise.
Stock indices in the rest of Asia were mixed and higher in Europe.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.