(Reuters) — The tech-heavy Nasdaq led Wall Street’s main stock indexes higher on Monday, with Meta among the top gainers after a report said the megacap was preparing for sweeping AI-related layoffs, while the Middle East conflict kept risk-taking in check.
Meta gained 2.6% after Reuters reported that the company plans to shrink its workforce by 20% or more to offset costly artificial-intelligence infrastructure bets and prepare for greater efficiency brought about by AI-assisted workers.
AI is expected to stay in the spotlight this week, with chip giant Nvidia’s CEO set to reveal new chips and software at the company’s annual developer conference later in the day. The chipmaker gained 2.6%.
Electronics giant Taiwan’s Foxconn, Nvidia’s biggest server maker, issued a strong quarterly revenue forecast on Monday.
All of the 11 S&P 500 sectors were higher, with tech leading with a 1.8% rise.
Tesla rose 2.1% as Elon Musk said the company’s Terafab project to make AI chips will launch in seven days.
Meanwhile, chipmaker Micron climbed 6.3% following the announcement of the company’s plans for a second manufacturing facility in Taiwan.
A modest drop in crude prices after the U.S. said it would be “fine” with some Iranian, Indian and Chinese ships moving through the Strait of Hormuz, also offered some relief to the market.
The impact of higher energy costs is likely to feature prominently in central bank meetings globally this week. The Federal Reserve is weighing tariff costs and signs of a weakening jobs market before making a call on interest rates in its upcoming meeting.
“There are a couple of reasons to take any signals from this meeting with a pinch of salt. First, a swing in oil prices in either direction could quickly change the Fed’s thinking, and second, markets might slightly discount messages from Chair (Jerome) Powell, given this will be one of the last of his term,” said James McCann, senior economist at Edward Jones in a note.
The Fed is widely expected to leave rates unchanged at the end of its two-day meeting on Wednesday. Traders have pushed back their expectations for an interest rate cut of at least 25 basis points beyond October, according to LSEG-compiled data, compared with their previous expectation of a cut in July.
At 11:45 a.m. ET, the Dow Jones Industrial Average rose 485.19 points, or 1.04%, to 47,040.91, the S&P 500 gained 77.06 points, or 1.15%, to 6,708.70 and the Nasdaq Composite gained 316.56 points, or 1.43%, to 22,420.61.
Wall Street’s fear gauge, the CBOE volatility index, dropped 3.47 points to 23.72, while the rate-sensitive Russell 2000 index gained 1.4%.
Wall Street’s main indexes have been fraught with volatility since the war began, as traders try to gauge its repercussions on the economy.
Despite logging declines over the past three weeks, U.S. equities have fared better than global peers, buoyed by a rebound in beaten-down technology stocks and as the country is a net oil exporter.
On the data front, February industrial production increased 0.2%, slightly better than expectations of a 0.1% rise.
Meanwhile, top U.S. and Chinese economic officials were due to conclude talks in Paris and further talks are expected to be held between President Donald Trump and Xi Jinping in Beijing, sources familiar with the discussions said.
Energy stocks Occidental and ConocoPhillips traded slightly lower, while travel stocks Delta and Norwegian Cruise gained 3.4% and 5%, respectively.
Crypto stocks such as Strategy added 4.7% as bitcoin rallied over 3%.
Discount retailer Dollar Tree gained 6.4% after signaling it could benefit from favorable tariffs in the near term.
Advancing issues outnumbered decliners by a 3.99-to-1 ratio on the NYSE, and by a 3.08-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and six new lows, while the Nasdaq Composite recorded 40 new highs and 96 new lows.
