S&P 500 Hits Fresh Record High

The benchmark S&P 500 scaled a fresh record high Monday, extending a bull-market run into a new week on a boost from megacap and chip stocks, while corporate earnings and clues on rate cuts continued to top investors' radar.

The S&P 500 hit a new record high, surpassing Friday's high of 4,842.07 points, as megacaps such as Alphabet, Meta Platforms and Apple added over 1% each.

Chip stocks Nvidia, Advanced Micro Devices and Micron Technology too advanced between 0.6% and 1.7%, taking the Philadelphia SE Semiconductor index up by 0.6% to a new all-time high.

"We should expect a possibly 5% more upside before we slip into a decline of 5% or more because that's what's happened every time we recouped all that we lost in a bear market since World War Two," said Sam Stovall, chief investment strategist at CFRA Research in New York.

Wall Street had stalled at the start of 2024 after the prior year's stellar run, as investors reassessed a quicker start to interest-rate cuts in light of mixed economic data and Federal Reserve policymakers playing down such bets.

However, on Friday the benchmark index closed at its all-time high in over two years, confirming a bull market since its October 2022 closing low, after a strong artificial-intelligence focused forecast from Taiwan's TSMC.

"AI will always be in the background, but as we approach the next Fed meeting, a lot of the conversation will surround the U.S. central bank and pretty much confirm that they will wait until May before cutting interest rates," Stovall added.

Traders have sharply pared bets of an at least 25-basis-point rate cut in March, currently standing at 46%, according to the CME Group's FedWatch Tool, from the over 80% chances seen by the end of 2023.

Investors will parse the personal consumption expenditure (PCE) index - the Fed's preferred inflation gauge, S&P Global PMI readings and an advance fourth-quarter GDP print this week to assess the central bank's next policy decision when it meets on Jan. 31.

Big-ticket earnings this week from Netflix, Tesla , Abbott Laboratories, Intel and Johnson & Johnson, among others, will also be watched for insights into the health of corporate America.

United Airlines Holdings, Brown & Brown and Zions Bancorp are set to detail earnings after market close.

So far, 84.6% of the S&P 500 companies that have reported results have surpassed earnings expectations, LSEG data showed on Friday, compared with the 93.1% beat seen in the previous week.

At 9:55 a.m. ET, the Dow Jones Industrial Average was up 220.29 points, or 0.58%, at 38,084.09, the S&P 500 was up 27.20 points, or 0.56%, at 4,867.01, and the Nasdaq Composite was up 113.45 points, or 0.74%, at 15,424.42.

Renewable energy firm SolarEdge gained 9.7% on plans to lay off about 16% of its global workforce.

Archer-Daniels-Midland slumped 18.5% after placing its CFO Vikram Luthar on administrative leave for an investigation and cutting its full-year profit forecast.

Advancing issues outnumbered decliners by a 4.21-to-1 ratio on the NYSE and by a 3.01-to-1 ratio on the Nasdaq.

The S&P index recorded 73 new 52-week highs and two new lows, while the Nasdaq recorded 125 new highs and 66 new lows.