© Reuters.
By Yasin Ebrahim
Investing.com – The Dow started the week on the front foot Monday, as a Twitter-inspired rally in tech overshadowed concerns about a recession ahead amid bets on the Federal Reserve stepping up the pace of monetary policy tightening.
The Dow Jones Industrial Average rose 0.30%, The S&P 500 added 0.8%, and, the Nasdaq rallied 1.9%.
Twitter (NYSE:TWTR) jumped 27% after Tesla CEO Elon Musk became the social media giant’s largest shareholder, taking a 9.2% stake in the company.
Musk, a vocal critic of Twitter, isn’t expected to be a passive shareholder and will likely look to build on his stake to influence change at the social media giant.
“We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” Wedbush said in a note.
Other social media stocks including Snap (NYSE:SNAP), Meta Platforms (NASDAQ:FB), and Pinterest (NYSE:PINS) were up sharply.
Tesla (NASDAQ:TSLA), meanwhile, gained 5% after the electric automaker delivered a record 310,000 vehicles during the first quarter, just shy of Wall Street's estimates of 312,000.
Big tech started the week on the front foot. Apple (NASDAQ:AAPL) was up more than 1% despite negative commentary from Loop Capital forecasting the tech giant to slash iPhone production for 2022 to a range of 245 million and 250 million.
Microsoft Corporation (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN) were up more than 1%.
A key part of the yield curve, the 10-year Treasury yield over 2-year Treasury yield, remained inverted on Monday, keeping fears that a recession may be brewing front and center.
The bid in tech helped offset losses in consumer staples and health care, with Dow heavyweights including Coca-Cola (NYSE:KO), McDonald’s (NYSE:MCD), and Johnson & Johnson (NYSE:JNJ) ending the day in the red.
Financials were dragged lower by falling banks stocks as a flattening yield curve limits their margins on lending.
JPMorgan (NYSE:JPM) was less than 1% higher after chief executive Jamie Dimon said the bank could face a potential $1 billion write-down from its assets in Russia.
On the Ukraine-Russia war front, peace talks between the two nations resumed Monday despite the U.S. and its allies eyeing fresh sanctions on Russia after reports of mass civilian deaths in Bucha, Ukraine.
Energy stocks struggled to turn positive despite rising oil prices rallied as expectations of fresh sanction against Russia stoked fears of tighter supplies.
Exxon Mobil (NYSE:XOM) was flat after forecasting a rise in quarterly operating profit in the first quarter, underpinned by rising oil and gas prices.
In other news, Starbucks (NASDAQ:SBUX) fell nearly 4% after the coffee chain suspended its share repurchase program.
