US stocks
Make or break week for US stocks Image Credit: Gulf News archive

New York: US stocks closed higher Monday thanks to a technical rebound and bargain-hunting after last week's nightmarish run.

The Dow Jones industrial average gained 0.64 percent, the tech-rich Nasdaq was up 0.76 percent and the S&P 500 ended 0.69 percent higher.

All three indices had opened in the red Monday morning, before oscillating back and forth much of the day and finally gaining points before the close.

"I think today it really was about bargain hunting," RegentAtlantic analyst Andy Kapyrin said.

Major Nasdaq stocks, such as Apple (+2.5 percent), Meta (+1.18 percent) and Nvidia (+1.39 percent) all ended higher after struggling for several days.

After flagging Friday, FedEx (+1.17 percent ) was also in demand Monday, as was Gap (+4.39 percent), which was hit by a downturn last week after its deal with designer and rapper Kanye West ended.

Technical rebound said the markets also benefitted from a technical rebound, with the S&P 500 flipping its direction after nearing a low Friday.

Investors have their sights fixed on Washington as the Federal Reserve meets Tuesday and is expected to announce 75 basis point interest rate increase Wednesday.

"The market is so oversold, so bearish, so few people optimistic on equities, that there's very little room for a negative surprise," Kapyrin said of Wednesday's announcement, predicting it would be unlikely for investors to react negatively to a rate increase.

Monday also saw a further rise in bond rates, in line with the Fed's recent moves. Ten-year US Treasury bonds hit 3.5 percent for the first time in 11 years.

And two-year rates went up to 3.96 percent for the first time in nearly 15 years.

"We very rapidly have gone from a place where investors have not really seemed to be paying much attention to what the Fed says" to "a really a fitful and sporadic investor reaction" to Fed announcements, US Bank Wealth Management investor Bill Merz said.

Merz said the market will likely be more sensitive to the Fed's economic projections Wednesday than any rate changes.