June 5 (Reuters) – The S&P 500 and the Nasdaq rose on Monday, as Apple hit an all-time peak and investors weighed the chances of the Federal Reserve holding off on raising interest rates at an upcoming policy meeting .
Shares of Apple Inc ( AAPL.O ) rose 1.8% to hit an all-time high ahead of its annual software developer conference later in the day, where the iPhone maker is expected to announce a new mixed -reality headset.
Other growth stocks also rose, with Alphabet Inc ( GOOGL.O ) gaining 1.8% and Amazon.com Inc ( AMZN.O ) adding 0.9%.
US stocks rallied on Friday after a report showed that wage growth moderated in May, raising hopes that the central bank may skip a rate hike next week, as investors welcome a deal in Washington that averted a catastrophic debt default.
Traders have priced in a nearly 80% chance the Fed will hold interest rates at its June 13-14 policy meeting, according to CME Group’s Fedwatch tool, though they expect another hike in July.
“We are now waiting for the next key data point and to determine whether the Fed will skip or pause or hike,” said Thomas Hayes, chairman at Great Hill Capital LLC.
A stronger-than-expected earnings season and hopes of the Fed ending its aggressive monetary tightening cycle have boosted US equity markets in recent months, with the rebound putting the S&P 500 on track to close of 20% above its closing lows in October 2022.
A survey from the Institute for Supply Management showed that the US service sector grew slightly in May as new orders slowed, pushing a measure of prices paid by businesses for inputs to three -year low, which could help the Fed’s fight against inflation.
“It’s a little worrisome because we’re close to that expansion-contraction threshold. It certainly adds to the uncertainty of whether we’re going to enter a recession or not,” said Sam Stovall, chief investment strategist at Research at CFRA.
At 12:02 pm ET, the Dow Jones Industrial Average (.DJI) was down 84.58 points, or 0.25%, at 33,678.18, the S&P 500 (.SPX) was up 9.23 points, or 0.22%, at 4,291.60, and the Nasdaq Composite (.IXIC) rose 60.32 points, or 0.46%, to 13,301.08.
Palo Alto Networks Inc (PANW.O) climbed 5.5% as the cybersecurity firm looked set to replace Dish Network (DISH.O) in the S&P 500 index. It fell 1.0%.
Big US banks slipped after the Wall Street Journal reported that US regulators were preparing to tighten rules for big banks, which could include raising their capital requirements by 20% on average.
Tesla Inc ( TSLA.O ) gained 1.6% after the electric vehicle maker’s sales of Chinese-made vehicles jumped in China in May.
Bearish issues advanced more for a 1.56-to-1 ratio on the NYSE and for a 1.35-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and two new lows, while the Nasdaq recorded 70 new highs and 32 new lows.
Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Vinay Dwivedi and Anil D’Silva
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