Wall Street closed sharply higher on Monday, fueled by surging technology stocks as investors began an earnings-heavy week with a renewed enthusiasm for market-leading momentum stocks that were battered last year.

All three major stock indexes extended Friday's gains, with the tech-heavy Nasdaq leading the pack, boosted by semiconductor shares.

"(Chips are) a group that's been depressed, so I’m not too surprised," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "We're going to see earnings from these companies over the next couple of weeks and that will be where the rubber meets the road."

"It’s a group that was ripe for a rebound."

The session marks a calm before the storm in a week jam-packed with high profile earnings reports and back-end loaded with crucial economic data.

Investors are all but certain the Federal Reserve will implement a bite-sized interest rate hike next week even as the US central bank remains committed to taming the hottest inflationary cycle in decades.

"(Investors) are pretty comfortable that they’re going to see lower rate hikes from the Fed, that we are rounding the corner on inflation and interest rate hikes," Tuz added. "Stocks can do well in that environment, especially the big growth stocks that drive the market."

Financial markets have priced in a 99.9 percent likelihood of a 25 basis point hike to the Fed funds target rate at the conclusion of its two-day monetary policy meeting next Wednesday, according to CME's FedWatch tool.

The Dow Jones Industrial Average rose 0.76 percent, to 33,630, the S&P 500 gained 1.19 percent, to 4,020 and the Nasdaq added 2.01 percent, to 11,364.

Tesla surged 7.7 percent after Chief Executive Elon Musk took the stand in his fraud trial related to a tweet saying he had backing to take the electric automaker private.

Cloud-based software firm Salesforce jumped 3.1 percent following news that activist investor Elliot Management has taken a multibillion-dollar stake in the company.

Spotify Technology SA joined the growing list of tech-related companies to announce impending job cuts, shedding 6 percent of its workforce as rising interest rates and the looming possibility of recession continue to pressure growth stocks. The music streaming company's shares rose 2.1 percent. (Reuters)
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Last updated: 2023-01-24 HKT 08:38