S&P 500 climbs for best day since early June as Nvidia shares lead tech turnaround

The S&P 500 rose Monday to notch its best day since June 5 as tech shares bounced on the heels of the worst weekly loss for the index since April.

The benchmark climbed 1.08% to settle at 5,564.41 and clinch its best day since June 5, while the Nasdaq Composite advanced 1.58% to close at 18,007.57. The Dow Jones Industrial Average rose 127.91 points, or 0.32%, to finish at 40,415.44.

Nvidia popped 4.8%, recovering some of its 8% pullback from last week. Other major tech stocks such as Meta Platforms and Alphabet also rose more than 2%. CrowdStrike was the worst performer in the S&P 500, dropping 13.5% and building on last week’s nearly 18% loss.

“We’re seeing a rotation back into the technology sector after a pretty meaningful sell-off, exacerbated by the CrowdStrike meltdown,” said Mona Mahajan, a senior investment strategist at Edward Jones. “A combination of broadening in earnings and the Fed cutting rates is giving investors some hope.”

Tech stocks were under pressure last week as investors rotated out of those names in favor of smaller names, sending the S&P 500 lower by nearly 2% last week. The Nasdaq shed more than 3% during that period.

Despite tech’s strong gains, small-cap stocks held up. The Russell 2000 closed about 1.7% higher on Monday.

Traders also kept an eye on the U.S. political landscape after President Joe Biden dropped out of the presidential race on Sunday and endorsed Vice President Kamala Harris. Since Biden’s disastrous debate performance in June, many analysts were seeing an increasing likelihood of a win by former President Donald Trump in November.

Earnings and central bank policy remain top of mind for Wall Street. Traders have been pricing in a nearly 93% likelihood of the Federal Reserve cutting interest rates during its September meeting.