S&P 500 inches higher to start the week, tech led, Nasdaq jumps 1.5%

The S&P 500 and Nasdaq Composite gained on Monday as traders shook off fears of a recession and bought tech stocks beat up in the first quarter.

The Dow Jones Industrial Average was up 70 points. The S&P 500 gained 0.5% and Nasdaq Composite rose 1.5%.

Tech stocks, which were among the worst-hit sectors in the first quarter as investors feared the Fed’s rate hike plans could hamper the group, rose Monday.

Twitter boosted the Nasdaq after shares rose more than 28% following news that Elon Musk had bought a 9.2% passive stake in the company. Tesla’s stock also rose 4% on Saturday’s latest quarterly electric vehicle delivery figures, which were higher than a year earlier.

Technology companies, including Apple, Amazon, Nvidia and Microsoft, also rose more than 1%.

“Again, because tech really took a hit in the first quarter, it’s kind of a relief for tech at this point, as well as for the other growth-oriented industries,” said Sam Stovall, CFRA’s chief investment strategist. † “The Nasdaq is clearly leading the way… really because there isn’t much new news to put additional pressure on the Nasdaq.”

Meanwhile, Starbucks shares fell 4.4% after the coffee chain suspended its share buyback program.

A significant portion of the yield curve has remained inverted after 2-year and 10-year government bond yields shifted for the first time since 2019 on Thursday evening. The yield on 5-year bonds also trades above its 30-year counterpart.

“It probably means the shot clock has started toward a potential recession,” said Ryan Detrick of LPL Financial. “The good news is that historically it can take more than a few years for a recession to actually take hold.”

Meanwhile, with WTI crude rising 2.4% and back above $100 a barrel, oil prices rose 1.8%, further raising investor concerns about a potential recession.

Oil’s gains came as investors continued to monitor the latest developments in Ukraine. German Chancellor Olaf Scholz said on Sunday that Western countries will impose additional sanctions on Russia in the coming days.

“Stock and bond markets continued to send conflicting signals about the economic outlook,” UBS said in a recent message to customers. “We caution against over-interpreting both signals. Yield curve inversions have historically predicted recessions with a long and uncertain lag, while hopes for ceasefire negotiations have ebbed and flowed,” the company added.

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Wall Street is coming out of a winning session, with the Dow, S&P 500 and Nasdaq all making gains on Friday. The S&P 500 also posted its third consecutive week of gains.

Wall Street has entered a strong season with April typically being one of the best months for stocks.

According to data from JC O’Hara of MKM Partners, the S&P 500 made an average gain of 2.41% in April over the past 20 years. The data also shows that the S&P 500 has made gains in April in 16 of the past 17 years.