US stock markets closed higher on Monday at the start of a shortened trading week, with technology stocks particularly in demand among investors.
Wall Street will be closed on Thursday for the Thanksgiving holiday. On Friday, known as Black Friday, markets will open for only half a day. Trading volumes are expected to remain relatively muted this week.
The Dow Jones index ended the day up 0.4% at 46,448.27 points. The broader S&P 500 index gained 1.6% to close at 6,705.12 points, while the tech-heavy Nasdaq jumped 2.7% to 22,872.01 points.
Despite the recent recovery, US indices have seen significant declines since the start of the month due to concerns over high valuations of major tech companies.
Investor optimism was fuelled by hopes that the Federal Reserve might lower interest rates further this year to stimulate the economy.
On Friday, market indices in New York rose following comments from Fed official John Williams, who indicated there may still be room for a rate cut in the near future. He argued that the weak labour market poses a greater economic risk than higher inflation.
Traders are now predicting a 75% chance of an interest-rate cut in December, compared to about 42% last week. The Federal Reserve’s final interest-rate meeting of the year is scheduled for 9-10 December.
Tesla shares surged 6.8% on Monday after CEO Elon Musk praised developments in the company’s AI chips, which are already used in its cars and data centres. Other technology stocks, including Broadcom, Marvell Technology, and Micron, also posted gains, with increases of up to 11%.
