Nasdaq, S&P 500 Reach Best Closing Levels In Over A Year

(RTTNews) - Stocks moved mostly higher during trading on Monday, adding to the modest gains posted last week. With the upward move on the day, the Nasdaq and the S&P 500 reached their best closing levels in over a year.

The major averages finished the day just off their highs of the session. The Nasdaq surged 202.78 points or 1.5 percent to 13,461.92, the S&P 500 jumped 40.07 points or 0.9 percent to 4,338.93 and the Dow climbed 189.55 points or 0.6 percent to 34,066.33.

The strength on Wall Street comes as traders look ahead to the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

The Fed is widely expected to pause its recent interest rate increases but is also likely to reiterate its commitment to bringing inflation down to its 2 percent target.

CME Group's FedWatch Tool is currently indicating a 78.1 percent chance the Fed will leave rates unchanged but a 56.7 percent chance of another quarter point rate hike next month.

The Fed's accompanying statement is likely to have a significant impact on the outlook for rates along with some closely watched inflation data due to be released in the coming days.

Overall trading activity remained relatively subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Semiconductor and networking stocks saw substantial strength on the day, contributing to the jump by the Nasdaq.

Reflecting the strength in the sectors, the Philadelphia Semiconductor Index and the NYSE Arca Networking Index surged by 3.3 percent and 3.0 percent, respectively.

Significant strength was also visible among airline stocks, with the NYSE Arca Airline Index climbing by 1.8 percent to its best closing level in over a year.

Software, retail and computer hardware stocks also saw notable strength, while energy stocks moved lower along with the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index rose by 0.5 percent, while China's Shanghai Composite Index slipped by 0.1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index advanced by 0.9 percent, the French CAC 40 Index climbed by 0.5 percent and the U.K.'s FTSE 100 Index inched up by 0.1 percent.

In the bond market, treasuries turned lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.0 basis points to 3.765 percent.

Looking Ahead

Trading on Tuesday is likely to be driven by reaction to a report on consumer price inflation, which could have a significant impact on the outlook for interest rates.