Wall Street Closes Mixed; Nasdaq Rises on Tech Rebound Amid Rate Hike Concerns

U.S. stock markets closed with mixed results on Monday, as the Nasdaq Composite registered a notable gain of 0.86%. This rebound was primarily driven by a recovery in the technology sector, which had suffered a significant downturn the previous Friday.

On Friday, the tech-heavy Nasdaq experienced its sharpest decline in over a year. This sell-off was attributed to growing probabilities of the Federal Reserve implementing further interest rate hikes. Concerns about persistent inflation and a robust labor market have fueled expectations that the central bank might maintain a tighter monetary policy.

Monday's trading saw the Dow Jones Industrial Average decrease by 0.16%, while the S&P 500 saw a modest increase of 0.30%. The Nasdaq's recovery was bolstered by major tech stocks, including Intel, Micron, Applied Materials, AMD, Broadcom, and Nvidia, which regained some of the ground lost on Friday. These companies, particularly those involved in artificial intelligence and semiconductors, are sensitive to shifts in economic outlook and interest rate expectations.

Looking ahead, market participants are closely monitoring upcoming economic indicators. The U.S. government is set to release May inflation data this Wednesday. This report is expected to offer crucial insights into the Federal Reserve's future policy decisions. Current market sentiment, as indicated by the CME FedWatch tool, suggests a prevailing expectation of a rate hike in December.

Geopolitical tensions in the Middle East also continued to influence market sentiment, even as Iran reported ceasing attacks against Israel following recent escalations. The price of West Texas Intermediate crude oil rose to $91.30 per barrel, contributing to a moderation of initial market gains. Investors are also anticipating the upcoming IPO of SpaceX, scheduled for Friday on the Nasdaq, which is poised to be the largest stock market debut in history.