Gains in technology helped the Nasdaq Composite skirt losses on Monday as traders added to bets that inflation may be easing.
The Nasdaq was the only major index to end the day up as it got boosted by a nearly 6% rally in Tesla shares. The tech-heavy index gained 66.36 points, or 0.6%, to end at 10,635.65 points.
The Dow Jones Industrial Average dropped 112.96 points, or 0.3%, to end at 33,517.65 as defensive drug stocks like Merck and Johnson & Johnson weighed on the average. The S&P 500 lost 0.1%, or 2.99 points, to close at 3,892.09, but the information technology sector’s 1.1% gain help pare the index’s losses.
“The market, at least for 2023, seems a lot more optimistic than how we ended in 2022,” said Chris Zaccarelli, chief investing officer at the Independent Advisor Alliance. “Today is another one of those days where you’re really seeing growth outperform value, and you’re seeing a return to optimism in terms of what might happen for the stock market this year.”
Monday’s moves follow a winning, shortened week for the three major indexes, with the Dow and S&P 500 posting their best weeks since November. A chunk of those gains came Friday on the back of the labor and service sector data that spurred hopes the economy was contracting enough to appease the Federal Reserve.
And Monday marked the fifth trading day of 2023, reminding investors of a classic Wall Street rule that suggests the market will end the year up if stocks perform well in the first five sessions. The S&P 500 has ended the year positive 83% of the times it finished the first five trading sessions up — and with an average gain of 14%, according to the Stock Trader’s Almanac. The broad index gained 1.1% over the first five trading days in 2023.
Later in the week, investors will watch for December’s consumer price index report coming Thursday and big bank earnings scheduled for Friday.
