US Tech Giants Lead Rally: Nvidia, Alphabet Drive S&P 500 Technology Index Up by 0.5%

US stock indices closed higher on Monday, driven by a surge in mega-cap technology and growth stocks ahead of the US Federal Reserve’s upcoming interest rate decision.

Tech stocks in the US experienced a rally, propelling the Nasdaq 100 by nearly 1%, with a gauge of the top tech megacaps climbing twice as much. The S&P 500 technology index also saw gains, closing up 0.5%.

Among notable tech stocks, Alphabet, Google’s parent company, saw its shares soar by 4.4% following reports from Bloomberg News suggesting talks between Apple Inc. and Google regarding the integration of Google’s Gemini artificial intelligence engine into the iPhone. Apple’s stock price ended the day 0.6% higher.

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The communication services sector performed strongly, ending up almost 3%.

Nvidia shares rose by 0.7%, although they closed below their session high. This followed the chipmaker’s annual developer conference, where CEO Jensen Huang unveiled new chips aimed at further solidifying the company’s dominance in AI computing.

Tesla shares led percentage gains in the S&P 500, closing 6.3% higher after the electric carmaker announced plans to increase the price of its Model Y EVs in certain parts of Europe.

Meta shares also saw an uptick, gaining 2.66% to close at $496.98 apiece.

In summary, the Dow Jones Industrial Average gained 75.66 points, or 0.20%, closing at 38,790.43, while the S&P 500 rose 32.33 points, or 0.63%, reaching 5,149.42. The Nasdaq Composite finished 130.27 points, or 0.82%, higher at 16,103.45, breaking a three-day losing streak.

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On the Nasdaq, 1,905 stocks saw increases while 2,400 fell, with declining issues slightly outnumbering advancers by about a 1.26-to-1 ratio, according to Reuters.

Investors are eagerly awaiting the US Federal Reserve’s meeting this week for further insights into the potential timeline for interest rate adjustments.