U.S. stocks climbed on Monday as the technology sector and shares benefiting the most from the economic reopening led the advance.
The Dow Jones Industrial Average rose 250 points. The S&P 500 gained 1.2%, boosted by the tech and communication services sectors. The Nasdaq Composite popped 1.6% as Alphabet, Facebook and Microsoft all jumped more than 2%.
Tech stocks gained to shake off another rough period for bitcoin over the weekend as the cryptocurrency bounced Monday. The cryptocurrency dropped under $32,000 on Sunday, only to rebound 20% to above $39,000 on Monday. On Wednesday, bitcoin prices tumbled to just above $30,000, dropping to the lowest level since late January.
Coinbase added 1.3% as bitcoin stabilized Monday and as Goldman started the crypto-exchange with a buy rating. Shares of Tesla, a big holder of the crypto, rose 1.5% despite the bitcoin volatility.
Stocks benefiting from the economic reopening gained. Share of American Airlines, Carnival and United Airlines all traded at least 1% higher. Norwegian Cruise Line jumped 4.6% after the cruise line operator announced plans to return cruising in the U.S. this summer.
“We continue to see incremental data points that strengthen our view that when equities break out of this range, the next move is a substantial rise higher,” wrote Tom Lee, head of research at Fundstrat Global Advisors. Lee cited data showing a collapse in Covid-19 cases.
Covid cases in the U.S. have dropped to their lowest level since June as the nation prepares for Memorial Day weekend. The seven-day average of new infections is about 26,000 as of Sunday, according to data compiled by Johns Hopkins University.
Shares of Target rose about 1% to an all-time high on Monday.
Wall Street came off a negative week for the blue-chip Dow and the S&P 500 as the market’s rally to records stalled. The Dow dipped just 0.5% on the week, while the S&P lost just 0.4%. The Nasdaq Composite, meanwhile, gained 0.31% last week, snapping a four-week losing streak.
Despite last week’s “collapse in crypto markets and rather hawkish FOMC minutes, another equity dip was bought by investors,” JPMorgan wrote in a note to clients. “This ‘buy the dip’ mentality has been remarkably strong this year and has provided a support preventing any small correction in equities and risk markets from becoming more extended,” the firm added.
The Federal Reserve hinted at its April meeting that easy monetary policies could be reconsidered if the economy continues to show signs of rapid improvement, according to minutes from the meeting released last week.
Heading into the last full trading week of the month, the Dow is on track to post a gain for May, while the S&P is on pace to snap a three-month winning streak. The Nasdaq Composite, which is down more than 3% for the month, is poised to snap its longest monthly winning streak since Jan. 2018, with its first negative month in seven.
“We think the choppy/sideways trend will continue for a bit longer, and the market will experience sell-off scares along the way,” noted Adam Crisafulli, founder of Vital Knowledge. “While stocks are absorbing a lot of changes well so far, all the inflection points still have longer to play out.”
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– CNBC’s Michael Bloom contributed reporting.