The S&P 500 rose Monday to its highest level in nine months, boosted by gains from technology giants like Apple.
Apple rose more than 1% to hit an all-time high, with shares last trading at $183.42 ahead of the widely anticipated unveiling of its virtual reality headset at its annual Worldwide Developers Conference. Other technology stocks gained, with Amazon and Alphabet last up more than 1% each. Netflix jumped 2.6%.
Stocks rallied last week after a strong May jobs report signaled to some investors that the long-anticipated recession may no longer be in the cards for the economy — or at least not until 2024. The passage of the debt ceiling bill also boosted investor sentiment.
“What the market is doing … I think is appropriate, but there are things that we don’t know yet and the big issue is the Fed,” Mohamed El-Erian told CNBC’s “Squawk Box” on Monday.
The Allianz chief economic advisor noted that while major debt and banking fears have dissipated, what comes next hinges on the Federal Reserve’s target for bringing down inflation. Markets would appear fairly priced if the central bank “acknowledges that 2% is the wrong target,” he said.
Despite recent moves, worries persist over what has so far proven a narrow stock market rally in 2023, led by just a handful of tech stocks, and whether there could be an intermediate-term correction if breadth fails to improve.
“We think as long as the economy continues to chug along and doesn’t show any signs of recession —which so far it hasn’t — the rest of the market can play catch up, and we’ll see some of those other sectors close the gap a little bit,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.