The S&P 500 technology sector extended Friday’s gains after a steep selloff last week. The S&P 500 Software Services index also clawed back some losses for a second straight day of gains after a bruising seven days of losses fuelled by fears that AI could intensify competition.
One big gainer in software was Oracle after D.A. Davidson upgraded it to a “buy” recommendation from “neutral.”
Along with the upgrade, Keith Lerner, chief investment officer at Truist Advisory Services, said another support for technology stocks came from comments CNBC attributed to Sam Altman, the CEO of Microsoft-backed OpenAI.
Altman told employees that the startup’s artificial intelligence chatbot, ChatGPT, was back to exceeding 10% monthly growth, according to CNBC’s report which Reuters could not independently verify.
“You’ve a sharply oversold market where a little bit of good news can go a long way.” said Lerner, adding that “the rubber band was stretched too far for tech and software” in last week’s selloff.
While the software index still has a long way to go to recoup all its losses from an exodus that started in late January, the broader tech sector was progressing closer to it pre-selloff levels.
According to preliminary data, the S&P 500 gained 30.39 points, or 0.47%, to end at 6,964.65 points, while the Nasdaq Composite gained 202.99 points, or 0.88%, to 23,234.20. The Dow Jones Industrial Average rose 17.12 points, or 0.03%, to 50,132.79.
The Dow was lagging the other two during Monday’s session although it did hit an intraday record high, after surpassing 50,000 points for the first time on Friday.
The materials index gained ground as advances in gold and silver boosted miners. However, the consumer staples sector, which had benefited during the technology selloff, was dragging on the S&P 500.
The Philadelphia SE Semiconductor index gained along with the technology sector. Traders must wait until later this month for results from AI chip leader Nvidia, with investors increasingly demanding measurable gains from capex plans. Nvidia rose during Monday’s session.
Coming closer in the pipeline is the January nonfarm payrolls report due on Wednesday, which was delayed by a partial government shutdown, and the closely watched January Consumer Price Index on Friday.
Markets are currently pricing in the year’s first interest-rate cut in June, according to CME Group’s FedWatch tool, which could be when US President Donald Trump’s nominee for Fed chair, Kevin Warsh, takes over.
Among individual stock movers, Hims & Hers Health tumbled sharply. Novo Nordisk sued the telehealth firm for patent infringement after the US firm launched, then canceled, a US$49 copy of the Danish drugmaker’s weight-loss pill Wegovy following backlash from the US Food and Drug Administration.
Workday shares slid after the human resources software provider announced co-founder Aneel Bhusri will return as its CEO.
Apollo Global Management rose after the asset manager reported a 13% rise in fourth-quarter profit.
Kyndryl shares slumped after the IT services provider delayed its quarterly filing and flagged material weakness in its financial reporting.
Kroger’s shares rallied after the grocery giant named former Walmart executive Greg Foran as its chief executive.
Advancing issues outnumbered decliners by a 2.13-to-1 ratio on the NYSE where there were 789 new highs and 99 new lows. On the Nasdaq, 2,887 stocks rose and 1,917 fell as advancing issues outnumbered decliners by a 1.51-to-1 ratio.
The S&P 500 posted 63 new 52-week highs and 20 new lows while the Nasdaq Composite recorded 165 new highs and 127 new lows.
Trading volume was relatively light on Monday with about 17.78 billion shares changing hands compared with the 20.66 billion moving average for the last 20 sessions.